Home Business Election 2019 Should accounting fees be tax-deductible?

Should accounting fees be tax-deductible?

Labor sets sights on "loophole for the rich".

Senior Digital Journalist, Your Money

Bill Shorten is calling it the tax rort of the wealthy that must be shut down.

In what will be seen as another hit against the country’s high earners, Labor is vowing to put an end to tax deductions on accountancy fees, which he sees is a loophole for the rich.

On Friday, Shorten said taxpayer money should be spent on education and out of pocket cancer treatment rather than “tax loopholes like deductions to accountants for $1 million.”

The policy is not new from Labor, but Friday’s comments by Shorten have sparked renewed criticism from Australia’s accountancy sector.

Speaking to Trading Day, Michael Croker, tax leader at the Chartered Accountants ANZ, said Shorten’s comments were “divisive, unfair and wildly inaccurate.”

“It’s a long-standing deduction in the income tax law…and it reflects the fact that in calculating your taxable income if you need the help of an experienced professional, you should get some tax relief,” explained Broker.

But if elected, Labor has said it wants to cap deductions for use of accountants at $3,000 for preparation of personal tax returns.

“Our industry’s very annoyed by it,” Croker said.

“Mr Shorten fails to acknowledge that around 75 per cent of Australians use the services of tax agents, many of whom are accountants, in preparing their annual income tax return.”

Croker argued that Australians are being unfairly punished for wanting to seek professional advice on what is arguably very difficult legislation to understand.

“You make the tax law very complicated, you empower the ATO with almost police-like powers…and then say, oh yes but when you hire someone to be in your corner…we’re going to cap the deduction at $3,000,” said Croker.

“It doesn’t make very much sense, especially coming from a party that says we’re a party for the fair go.”

Watch the discussion in the video above and visit our election page for more coverage.

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