Australians hit by the bushfires should know that help is available to them, including free legal aid as well as free tax assistance.
Tax services company H&R Block is offering free consultations to taxpayers who have been hit by the recent bushfires burning across Australia.
The free consultation can assist Australians with getting tax affairs back in order if they’ve lost records in the bushfire or are applying to the ATO for an extension.
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H&R Block director of tax communications Mark Chapman said tax might not be at the forefront of bushfire-affected residents right now.
“But we also recognise that when the time comes, many taxpayers will need help getting back onto their feet, understanding what their obligations are and how they can meet them when they may have lost valuable records,” he told Yahoo Finance.
“We can also explain exactly what concessions are available from the ATO.”
The ATO has announced a number of measures and concessions for bushfire-affected individuals and businesses, and a tax professional can help determine which ones apply to them.
On Wednesday, Treasurer Josh Frydenberg announced that those receiving disaster relief payments will get a tax break on those payments, following pressure on social media and from former prime ministers.
What you need to know if you’ve been hit by the bushfires
Here are Chapman’s tips if you or a loved one has been affected by the fires:
If you are unable to lodge your tax return or activity statement, the ATO can give you more time to lodge.
The ATO uses a list of 'affected postcodes' to identify people and businesses in disaster-affected areas. They then offer automatic extensions to those people whose tax obligations would ordinarily have fallen due at or about the time of the disaster. At present, the ATO has offered concessions to taxpayers in fire affected postcodes in New South Wales and Queensland but with fires still burning, additional postcodes in NSW, Victoria and South Australia are certain to be added in the next few days. In addition, existing deferrals may be extended.
Even if you are not in the affected postcode however, if you can show that were affected by the fire (perhaps your employer was in the fire affected district, for example, or perhaps you are in a neighbouring postcode which was also fire affected but not singled out by the ATO), you may still be able to ask for help from the ATO. H&R Block can advise you how to proceed.
If you are expecting a refund from an income tax return or activity statement, the ATO may be able to arrange for your refund to be issued as a priority.
If you are experiencing financial difficulties because of a disaster, you can ask the ATO for more time to pay your tax debt, interest free. This includes amounts owing on your activity statement.
If you are experiencing financial hardship as a result of a disaster, you may receive a relief payment from:
local, state or federal government agencies;
a charity or community group; or
What assistance payments will be taxed?
According to Chapman, most one-off assistance payments are tax-free. However, Centrelink payments will remain taxable.
Emergency payments from friends and family in the form of gifts won’t be taxed, nor will emergency assistance payments from your boss or “other non-periodic emergency relief payments,” he added.
“An employer is not required to withhold tax from a payment that is not taxable. An employer who gives emergency assistance to an employee can claim a tax deduction as a business expense.”
What if my receipts have been lost in a bushfire?
If activity statements or records of receipts you’ve made for your tax return claims have been destroyed in a fire, the ATO can accept the claim without it being substantiated.
“If you have been working as a volunteer, assisting people affected by a disaster – particularly if you have travelled interstate – the ATO may be able to give you more time to pay,” said Chapman.
Yahoo Finance has reached out to KPMG, PwC, EY and Deloitte for comment.
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