Get your tax return in on time and avoid being penalised by the Australian Tax Office.
Filing your income tax return is one of those annual chores that always seems to come around again far too quickly. It’s also one of those chores that many of us put off for as long as possible, leaving it until the last possible moment to finalise our returns.
However, if you don’t lodge your return before the ATO’s deadline, you could face a stiff fine.
When do I need to lodge my 2016/17 tax return?
- By October 31 2017 (if lodging yourself)
- By as late as 15 May 2018 (if lodging through a tax agent – conditions apply, see text for details)
Choosing a tax agent
When is the tax return deadline?
The tax return deadline if you’re lodging your tax return yourself is October 31. In other words, your tax return for the financial year from 1 July 2016 to 30 June 2017 must be filed by 31 October 2017.
However, if you lodge your tax return through a registered tax agent, the rules are a little different. Tax agents have a special facility with the ATO that allows them to lodge a return on your behalf after the October 31 deadline – but you must be registered with a tax agent by October 31 in order to take advantage of this extended deadline.
While the deadline for lodging through a tax agent varies depending on your personal circumstances, you potentially have until May 15 the following year to lodge your return – an extension of more than six months when compared to the normal deadline. So when filing your return for the 2016-17 financial year, the deadline is 15 May 2018 when submitting through an agent.
However, different rules apply if you lodge through a tax agent and you had tax payable of $20,000 or more in the previous financial year. If this is the case, the deadline moves forward slightly to March 31 the following year.
And if you have one or more unlodged tax returns from earlier years, you will be ineligible for the extended tax deadline and will need to submit your returns (this year’s return and the outstanding earlier returns) by October 31.
Who sets the tax return deadline?
The income tax return deadline is set by the ATO. As the Australian Government’s principal revenue collection agency, it’s the ATO’s job to collect tax from all income-earning Australians. The deadline is in place to ensure that all taxpayers pay the money they owe the government in a timely fashion, and that you receive any refund you may be entitled to.
Why might you miss the tax return deadline?
There are several reasons why you might have missed the ATO’s tax return deadline, such as:
- You were travelling overseas and didn’t submit your return in time
- You didn’t realise you needed to file a tax return until it was too late
- You forgot to file your return in time
- You were worried you would be burdened with a tax debt that you’d be unable to afford
- You failed to lodge because you were suffering from a serious illness
- You failed to lodge due to a natural disaster
- You failed to lodge due to a family breakdown
What to do if you miss the deadline
If the deadline has passed and you haven’t filed your return, the best thing you can do is lodge your return with the ATO as soon as possible. Unless there are extenuating circumstances, you may be hit with a late lodgment penalty – and this penalty increases the longer you wait to submit your return.
If you keep putting it off, the penalty you’ll be required to pay will only increase and you may eventually face prosecution. With this in mind, it’s worth your while to lodge your return as soon as possible and minimise the penalties that may apply.
The good news is that, if you have a good history of lodging your returns and paying any ATO debts on time, you may be able to avoid the late lodgment penalty. However, you will need to have a good reason for missing the deadline, and the sooner after the deadline you lodge your return the better.
What penalties apply if you miss the tax return deadline?
If you fail to lodge a return or statement with the ATO on time, you may need to pay a failure to lodge (FTL) penalty. This fine is calculated in multiples of a penalty unit, which currently stands at $210 but differed in previous years as per the table below:
|When infringement occurred||Penalty unit amount|
|Up to 27 December 2012||$110|
|28 December 2012 – 30 July 2015||$170|
|31 July 2015 – 30 June 2017||$180|
|On or after 1 July 2017||$210|
For individuals, the FTL penalty is calculated at the rate of one penalty unit for each period of 28 days (or part thereof) that your return is overdue, up to a maximum of five penalty units. So if you’re late lodging your return for the 2016-17 financial year, the following fees could apply:
- If your return is up to 28 days late: $210 fine
- If your return is 29-56 days late: $420 fine
- If your return is 57-84 days late: $630 fine
- If your return is 85-112 days late: $840 fine
- If your return is more than 112 days late: $1,050
If you’ve failed to lodge your return in time, the ATO will notify you in writing or over the phone. The ATO also doesn’t generally apply penalties in isolated cases of late lodgment, and will take your personal circumstances and history of compliance into account before deciding on the best course of action.
In addition, if you lodge your return after the deadline and incur a debt, the ATO will charge you interest on that debt from the date it was due until you end up paying it. The general interest charge (GIC) rate that applies to unpaid tax liabilities is reviewed quarterly, and for July to September 2017 was set at 8.73% p.a.