MyTax | an Opportunity and Threat to the Tax Profession
Over the last 25 years between 74% to 75% of salary and wage earners have paid a Registered Tax Agent to prepare and lodge their tax return with the Australian Tax Office (ATO) each year.
The other 25% of taxpayers have lodged their own tax returns with the ATO by various methods – initially through paper returns, then the Tax Pack, online Etax and now through the online MyTax.
The ATO have advised that up to the 8th September 2015 1,822,000 tax returns were lodged through MyTax and Etax. This is up 11% over the last year and is expected to grow to 4,000,000 tax returns over the next 5 years (which is 33% of the 12 million individual tax returns lodged annually in Australia.
This changing market dynamic is both a threat and an opportunity to the tax profession. Accountants need to be continually investing in their skills and knowledge to ensure they can meet the needs and requirements of the growing small business services market.
The accounting and tax market in Australia is massive – with over 17 billion of revenue for the year ended 30th June 2015. The industry has over 32,920 accounting practices/businesses and employs over 136.000 people.
The accounting and tax market is growing at more than twice the rate of inflation so provides plenty of growth opportunities for accountants that are investing in their skills and providing the services small businesses require. Services small business require include:
- Benchmarking
- Key performance indicator reviews
- Profit improvement review
- Business structure reviews
- Business plans
- Cash flow/budgeting
- Tax planning
- Monthly and quarterly financials
Many tax profession practices/principals want to continue operating exactly as they have been for the last 10, 15 or 20 years with no changes. These practices are starting to get left behind and are stagnating with minimal fees growth and declining profitability.
A question every tax professional needs to ask themselves is what changes do I need to make now?