You might have seen the ads or banner offering instant tax refund or same day tax refund/return during tax season. Do you exactly know how instant tax refund works? The tax refunds come directly from ATO. If some tax agents are offering you instant tax refund, that is not the tax refund you are receiving from Australian Tax Office (ATO).
Believe it or not an “instant” tax refund is a kind of short term loan from the Tax agent with high fees / interest charged.
For instance if you are expecting $1500 refund from ATO, you could apply for the instant tax refund and may only get $1300 after tax agent fees. You might as well borrow from family or friends and pay it back when you get your tax returns from ATO. You will save all the fees and hassle. If instant tax refund is absolute last option then carefully read all the terms of
the paperwork before signing.
We have heard of instances where tax payers have been charged anything from $100 to $500 to get an instant refund.
These days tax refund through the normal procedure through a tax agent could take anywhere from 5 to 14 days depending on the type of return and ATO conditions apply. An average time taken for a refund in the 2019 financial year as experienced by our practise has been about 7 days depending on type of tax return. Although the normal processing
time as prescribed by the ATO is 14 days. Hence why would you pay somebody a proportion of your tax refund just to get it 7 days or so earlier.
The whole process looks simple. You receive the money from the instant refund tax agent on the same day but ATO will directly pay to company later. The real problem occurs if ATO withheld the tax refund for
any reason in future you end up being in debt to the tax agents practise. As instant refund amount is a kind of short term loan you are liable to pay higher interest rate and other late payment fees.
Instant Tax Refund or Same Day Refund Does not exsit.
- Instant tax refund does not exist. It is a short-term loan with high interest rate and fees
- Normally tax agents charge higher fees on instant tax refund
- You end up paying more if something goes wrong while processing refund from ATO
- Read all the terms and conditions of the contract carefully
Contact most trusted tax agent, Accurate Business & Accounting Services, for all your tax returns matter today.