A taxing time
A good accountant can make all the difference at tax time, but what are the options for Australians who experience disadvantage, struggle with financial literacy or need some assistance with navigating tax requirements?
For many, tax returns and compliance are extra burdens that can have a serious impact on their financial wellbeing and mental health.
The UNSW Tax Clinic , a unique collaboration between the UNSW Business School, Centre for Social Impact (CSI) and Ecstra Foundation, is helping address these challenges with free tax advice and advocacy services for clients facing financial hardship.
The Clinic is one of 12 in NSW assisting people through teleconferencing support, with demand for these types of pro bono tax services continuing to grow.
Professor Michael Walpole, Acting Director of the Tax Clinic, says that many of their clients are in dire financial circumstances, often being pursued for debt or by the ATO for not lodging their tax return or business activity statement.
“Tax often feels too hard for people. But most of our clients end up with a payment arrangement so the debts are controlled, or they receive a refund. They’re fearful that they owe a lot of money and they’re in a lot of trouble, but often they walk away with money in their bank account,” says Michael.
“At the same time, we know that many of our clients experience other issues aside from tax problems, such as illness, mental health issues, and dependency problems. So, we provide cross-referrals to other outreach services.”
CSI UNSW’s Dr Jack Noone points out that financial insecurity is often the result of deeper structural inequities within society.
Several research projects with the Clinic are underway to examine these issues, including a project to identify the barriers people face when dealing with the tax system, and how one barrier may lead to another.
Another research project is focused on highlighting the role of referral pathways in improving social and financial outcomes.
“When one service refers a client to another service, it is difficult to know if that connection came to fruition and what the outcomes were,” says Jack.
“We want to work with financial counsellors, domestic violence services, mental health services and tax clinics to brainstorm different ways of referring clients between our organisations and to see what works best in different situations.”
Women, in particular, face complex financial challenges, including barriers to employment participation, the burden of unpaid and lowly-paid work, lower levels of financial literacy and confidence, and inadequate levels of superannuation.
“We are also about to start a project to provide culturally appropriate tax advice and representation to Indigenous women who have their own business,” says Jack.
In addition to its free tax service, the Clinic is also an incubator for business and accounting students who want to gain practical work experience and apply their tax expertise to people in need.
Tyler Huntley (pictured below), who is in his final year of a Bachelor of Commerce (Accounting) degree, empathises with many of his clients.
“I come from a family where my mother was a sole trader and went through financial hardship and bankruptcy. I quit school early to work full time and support my family. I know what it feels like on the other side and I want to give back. It’s really rewarding work,” says Tyler.
“Many of our clients are business owners and while many have had some good years, often it is a sudden event in their life - such as a death in the family, caring responsibilities, or a decline in their mental health - which affects their ability to stay on top of their tax.
“On top of poor mental health, taxes are just another stressor in their lives. It’s good to have the Clinic to help with it.”
A previous client of the tax clinic agrees, as she reflects on the relief of finally having her tax issues resolved:
“I can’t explain the weight that was lifted by having my tax returns completed - something that I should be capable of figuring out myself, but at this time in my life I was simply unable to cope with.”