ATO (tax office) payments by credit card

[burmans]

You really believe that because you (and I) did not request the refund, the direct crediting (or cheque) is an automatic process ????

Which branch of government would "give out / return" money without an elaborate process of check, double check and then signing off by some managers ?

I doubt that it exists.

Sure, the positive balance in your (tax) AC will flag it to someone but to label the process of refund "automatic" just simply because we did not ask is doubtful in truth IMO.

FWIW, I got $30 interests as well.

Presumably, that was automatic, too.

Well I've worked on tax systems so my belief is actually based on some knowledge of the system, but dont let that deter you for your opinions.

 

[Jack_OC]

What is being discussed is the deliberate overpayment of tax so that cheap and easy frequent flyer points can be collected. No different to any other technic used to game the system.....once a system is gamed, abused and discovered - it's shut down.

It has nothing to do with self assessment! Other than your bog standard self assessment - I can do it, so why not...

I see your point, except that in this case, the organisation being gamed (the credit card provider) has no way of knowing if tax was overpaid or not. The point I was making earlier is that all the credit card provide knows is that you have paid $x to the ATO. So IMHO, if anything is going to cause a credit card provider to rethink awarding points on ATO transactions, it's simply the amount of points they are dishing out. In other words, someone paying the ATO $500k per year is more likely to cause a problem than someone paying $50k. Whether either or both of those people are overpaying, underpaying or paying precisely the right amount of tax is irrelevant from the credit card provider's perspective. Even if it's true that card providers lose money when awarding points on ATO transactions (something I have always found hard to believe), then they will be bothered by anyone paying the ATO large amounts, whether those amounts are due to the ATO or not. On the other hand, if the card provider breaks even or better on ATO transactions, they will either not care either way, or be quite happy for people to pay more than they have to.

Wrt the ATO - as I said I'm not convinced this would concern them greatly, but even if it did, how would they go about shutting this down? By refusing to accept credit card payments any more? That would not be in their interests, so I can't see that happening. It's possible they might start to scrutinise individuals who keep mysteriously overpaying tax, and as Burmans said they could probably make life difficult for those people, but that wouldn't have any impact on anyone else.

 

[amaroo]

I see your point, except that in this case, the organisation being gamed (the credit card provider) has no way of knowing if tax was overpaid or not. The point I was making earlier is that all the credit card provide knows is that you have paid $x to the ATO. So IMHO, if anything is going to cause a credit card provider to rethink awarding points on ATO transactions, it's simply the amount of points they are dishing out. In other words, someone paying the ATO $500k per year is more likely to cause a problem than someone paying $50k. Whether either or both of those people are overpaying, underpaying or paying precisely the right amount of tax is irrelevant from the credit card provider's perspective. Even if it's true that card providers lose money when awarding points on ATO transactions (something I have always found hard to believe), then they will be bothered by anyone paying the ATO large amounts, whether those amounts are due to the ATO or not. On the other hand, if the card provider breaks even or better on ATO transactions, they will either not care either way, or be quite happy for people to pay more than they have to.

Wrt the ATO - as I said I'm not convinced this would concern them greatly, but even if it did, how would they go about shutting this down? By refusing to accept credit card payments any more? That would not be in their interests, so I can't see that happening. It's possible they might start to scrutinise individuals who keep mysteriously overpaying tax, and as Burmans said they could probably make life difficult for those people, but that wouldn't have any impact on anyone else.

All good points. IMO it's the ATO being gamed not the CC providers...I agree the CC providers will act on point earning/distribution independent of any concerns other than their own interests. Of course there is a possibility that the T&C of ones CC could see this type of transaction as being in breach? Who knows? Always a problem when you sail "close to the wind"...

The risk with this initiative is the ATO being seen as complicit in the "laundering" of money so that someone can take cheap flights in the first class:!:

 

[medhead]

AFAIK, issuing a refund is work.

I am not aware of an automatic refund process anywhere.

Lots of "accidents" lead to more such work and someone may decide to do something called "enhancement" to what we now know.

Unlike some others, I know my view could be incorrect.

If they want to give me a log in for their accounts I'd be more than happy to do that work for them.

You miss the point. Deliberate overpayments create work for the ATO. Someone has to review, approve and issue the refund....a timeline for this internal procedure has been quoted at around 2-3 months.

I doubt the ATO exists so that it can "clip the ticket" in a rinse and recycle gaming transaction that provides first class travel to exotic destinations at < $0.01 a point.

They seem to be able to issue my tax cheque in 14 days.

But seriously the government benefits payment system and the whole 10000++++++ pages of the tax act is just about entirely about rinse and recycle. It is my biggest bug bear about the whole system. The wastage of collecting our money and then paying it out.

 

[prozac]

It could raise the question of when is a purchase not a purchase.

 

[medhead]

What is being discussed is the deliberate overpayment of tax so that cheap and easy frequent flyer points can be collected. No different to any other technic used to game the system.....once a system is gamed, abused and discovered - it's shut down.

It has nothing to do with self assessment! Other than your bog standard self assessment - I can do it, so why not...

This is where you're missing the point. Why would the ATO give a damn about someone claiming points? (Clearly some card issuers care) Even if the ATO does give a damn any taxpayer with half a brain can just say that's what I thought I owed you. Turns out I was wrong. That is a response that is perfectly legal under the principles of self assessment. Hopefully now you might start to understand why I keep banging on about self assessment of tax liability.

If the ATO gives a damn about your perceived gaming of the system then they will need to completely undo the self assessment tax system.

Big picture stuff, sorry if it is confusing.

 

[amaroo]

<snlp>

Big picture stuff,

Big picture - LOL

It's just Greed!

 

[medhead]

Big picture - LOL

It's just Greed!

No doubt you'll stand by this statement and cut up all your points earning credit cards and resign from all frequent flyer programs.

Personally I see nothing greedy in people fulfilling their tax obligations. It's going to be even better in a couple of weeks when the tax rates all go up 2.5%. Can't wait to hear the celebration of the points earn from those who will be facing a 49% marginal tax rate.

Edit: I see your post has been liked by someone who will be especially happy about paying 49%

 

[amaroo]

No doubt you'll stand by this statement and cut up all your points earning credit cards and resign from all frequent flyer programs.

Personally I see nothing greedy in people fulfilling their tax obligations. It's going to be even better in a couple of weeks when the tax rates all go up 2.5%. Can't wait to hear the celebration of the points earn from those who will be facing a 49% marginal tax rate.

Edit: I see your post has been liked by someone who will be especially happy about paying 49%

No wonder your posts don't make any sense! We're talking about the deliberate over payment of a tax payment not paying a legitimate tax bill.

 

[Pukka]

No doubt you'll stand by this statement and cut up all your points earning credit cards and resign from all frequent flyer programs.

Personally I see nothing greedy in people fulfilling their tax obligations. It's going to be even better in a couple of weeks when the tax rates all go up 2.5%. Can't wait to hear the celebration of the points earn from those who will be facing a 49% marginal tax rate.

Edit: I see your post has been liked by someone who will be especially happy about paying 49%

I don't think all the tax rates will be going up 2.5% just the higher rates which is a bit of a shame. I think I'll take more holidays and spend some of my points

Just when I thought I'd paid every tax under the sun I've found another tax to pay Division 293 tax, maybe I'll forget about saving for retirement & just be a burden on everyone else

 

[legroom]

The big picture 'stuff' is along this line:

Multiple the accidentals by 10,000 - 100,000 every quarter*

They would then have to set up a mini 'returns' section where some staff would process the 'automatic' refunds.

The repercussion of those refunds is what some is nervous about.

Sure, one or two dozen refunds every quarter would not be a cause for concerns but...... the potential for deliberate accidentals is there for some to abuse.

It will take no brain to twig in the case of repeat accidentals every 1-2 quarters or so with the ATO used as a point enhancing laundering scheme as DISTINCT from lawful payments of tax $$ due.

Do we know what the response there will be ?

I have no idea and really have no wish to find out.

So, that's the 'point' about the points.

No one had ever mentioned anything about the CC providers or the legitimacy of those earning schemes at all.

It's all about some discussion upthread on the ease of refund .... along the line of how to max out on the XS cards.

Now, we all know what happened to those cards.

I'm rather perplexed that such a clear concept - deliberate 'accidentals' -fails to be grasped and delineated from legitimate processes (point earning, CC ATO payment, self assessment).


*: some exaggeration there to hammer in the point(s).

 

[prozac]

Maybe the ATO will establish a whole new dept. in order to deal with AFF accidental payments.....call it the AFFAOP Dept.

 

[medhead]

No wonder your posts don't make any sense! We're talking about the deliberate over payment of a tax payment not paying a legitimate tax bill.

In your opinion. I, in the other hand, do not call AFF members dishonest.

 

[Beta4Me]

In your opinion. I, in the other hand, do not call AFF members dishonest.

Semantics: dishonest, deliberate overpayments...meh.

 

[cove]

Have just re-loaded 5 cards just in case Bundy Bear needs my help. For us our May BAS has 3 pay fortnights so the numbers will grow a bit.

 

[burmans]

No wonder your posts don't make any sense! We're talking about the deliberate over payment of a tax payment not paying a legitimate tax bill.

And once again, overpayment of tax is not illegal, indeed the tax laws specifically allow it. I realise you think this is not legitimate but tax law doesn't.

 

[Beta4Me]

And once again, overpayment of tax is not illegal, indeed the tax laws specifically allow it. I realise you think this is not legitimate but tax law doesn't.

Not illegal, but I wouldn't exactly call it quite kosher either. I guess it's in a similar boat to mistake fares and 'trick it' etc.

 

[Pukka]

And once again, overpayment of tax is not illegal, indeed the tax laws specifically allow it. I realise you think this is not legitimate but tax law doesn't.

I don't think the Ato will be overly concerned in my experience they take at least 2 months to repay an overpayment but if I owe them they want it yesterday!

 

[burmans]

Not illegal, but I wouldn't exactly call it quite kosher either. I guess it's in a similar boat to mistake fares and 'trick it' etc.

Well of course commercial contracts are determined by commercial law rather than tax law so not really similar. I am really not use why you think the "not kosher" would ever override tax law, I can just imagine the Tax Commisioner trying that one in court!

 

[Beta4Me]

Well of course commercial contracts are determined by commercial law rather than tax law so not really similar. I am really not use why you think the "not kosher" would ever override tax law, I can just imagine the Tax Commisioner trying that one in court!

I'm enormously confused now. How does paying the ATO more tax and getting a refund have much to do with tax law at all?