Preventing delays in processing returns
While we strive to maintain our service commitment, longer than standard processing times occur when:
- returns for previous years have been lodged with the current year's return
- we need to cross-check data with other government agencies (including Centrelink and Child Support)
- a client has a debt or insolvency obligation with us
- we have queries about information provided in a return.
When these situations arise, we usually need to review the details, contact you and where necessary adjust the return.
In this section:
Avoid common errors
From 1 July 2015 to 31 December 2015, 409,000 individual tax returns received via the electronic lodgment service (ELS) were delayed in processing. This was due to incorrect or incomplete details such as name, address, date of birth, Australian financial institution account details and tax file number.
Other common errors include:
- providing insufficient or incorrect information – for example, not completing income test questions and spouse information or, providing incorrect private health insurance information
- lodging duplicate returns for the same year – if your client has already lodged their return and needs to correct a mistake, you must request an amendment
- repeating information – if you have already declared information at a previous question, don’t repeat it as additional information
- including information from a prior year return that is not relevant for the current year return – if rolling over details from a previous year’s return in your software, make sure you delete information that is no longer relevant, including additional information.
Client details that don’t match our records
Lodging returns with details that don't match our records will delay processing. We need to stop these returns to verify the details.
Before lodging your clients' returns:
- confirm details with your clients – particularly their names and addresses
- compare their details with those on the portal
- update any incorrect details.
If you transpose details from previous year returns, ensure that the details in your software are correct before lodging.
In most instances, if your client's surname does not match our records, we will process the return using the last known name recorded in our systems.
When lodging tax returns for multiple years (even if you are lodging them on or around the same day) ensure your clients' details are correct on all returns.
Providing additional information
Including additional information in a return stops processing as we need to check the information you provided. This will delay processing and in most cases, take longer than 12 days to review and confirm that information.
- Requests for advice that directly affect the calculation of tax for that specific return, such as:
- querying if an item in the return is eligible for inclusion as taxable income
- determining if private binding rulings relate to this return.
- Details we request to be included as additional information, for example, when a client:
- contributed to more than one superannuation fund or retirement savings account (RSA)
- is not an Australian resident and intends to claim a credit that the trustee had paid on their share of income from a resident trust.
- Software problems
- Include details of information you cannot enter at a particular field or label, including the value and field or label names.
- Foreign income, always include:
- net foreign income from a tax treaty country
- foreign income tax offset to be calculated by us.
- additional information if it is not relevant to the outcome of the income tax assessment
- additional information you have carried over from the previous year, unless it is current for the return being lodged
- information such as personal details (for example, family breakups), or work-related expenses
- written notes, such as 'final', 'nil return', 'please issue a notice of assessment', 'minutes', 'statement of distribution', 'other', or any numeric symbols
- information that is already included elsewhere on the tax return.
Tips for specific subjects
Include electing to withdraw from primary production averaging provisions:
- An election must be made in the year of the income tax return when your client first wants to withdraw. Include the date of withdrawal and quote section 392–25 to apply.
- Special/taxable professional income for primary producers when averaging details have not been applied in the previous year or years.
Leave out averaging provisions that have been applied correctly in previous years.
Lump sum payment in arrears
Include the amount of the lump sum and the breakdown of the amount of payment in arrears for each income year involved. This is required to correctly calculate a tax offset, if eligible. This applies to lump sum payment in arrears (LSPIA) on returns either at:
- Q7 labels Y or Z
- Q24 label Y.
- If the LSPIA amount is under 10% of the taxable income, less the amount of the LSPIA, employment termination payment (ETP) death component, other lump sum income and capital gains.
Part-year resident and non-resident clients with interest and dividend income should:
- details of amounts for interest and unfranking dividend income
- the country of residency, where unfranking dividends are to be returned; this will ensure the correct rate for the dividend income is applied.
- dates of entry and exit for the ‘Australia client resident under 183 days’ test
Full year non-residents should:
- interest and unfranked dividend income for the individual return at:
- gross interest item 10 label L
- unfranked dividends item 11 label S.
If the unfranked dividend income is not under an international agreement, then a rate of 30% is applied automatically by our system.
If the rate is 15%, then include either your client's:
- overseas postal or residential address
- country of residence.
Private health insurance
- Where an Australian private health insurance fund name is not included on the drop-down list, select Other – ATO use only. It's not necessary to include details in additional Information.
- As overseas funds are not eligible for the tax offset, do not include these details or any reference to them or make a private health insurance rebate (PHIR) claim.
- information the rental property did not derive an income
- information the rental property is now the owner’s own home
- the date the rental property was sold
- general information regarding rental income, expenses or property.
Rental information can be included if there is specific information not shown on the return or the Rental property schedule that affects the calculation of that specific return.
Longer than standard processing times occur if we need to cross-check data with other government agencies, your clients' details don't match our records and if we have to verify additional information provided in a return.