When it comes to tax returns in Australia, you need to make a yearly lodgement.

Running or managing a business involves a lot of moving parts, and forgetting to lodge a tax return in time happens. What matters is you lodge a tax return as soon as possible, especially if multiple deadlines have been missed, to avoid penalties and potential prosecutions.

The following guide outlines all you need to know about lodging a late tax return, possible repercussions, and how to best navigate the situation.

Do I need to lodge a tax return?

In order to keep the Australian Tax Office (ATO) up to date with your obligations, it’s imperative to lodge a tax return every single year, whether you are a sole trader, partnership, trust or company.

All forms of income must be declared by anyone earning in Australia.

How to lodge a late tax return

Getting up to date with your income tax returns after non-lodgement is essential for any size business. Failure to do so can lead to the ATO issuing default assessments that estimate your income minus deductions, typically resulting in higher tax liabilities.

To rectify this you must lodge an accurate return that proves your income and true tax liability. This will be specific to your construction or trade business, and a default assessment cannot be overturned by appeal alone.

Experts in lodging a tax return late can help navigate the precarious process of dealing directly with the ATO, ensuring each box is checked and every ‘t’ is crossed. More importantly, they will include all possible deductions to help reduce your taxable income.

Penalties for lodging a tax return late

Failure to lodge a tax return on time will lead to the ATO issuing a Failure To Lodge (FTL) penalty, based on how many 28 day periods you are late by. The current penalty rate is $222 per period, with a maximum of $1,110 per individual.

Automated FTL penalties can be applied to most late lodgements for the construction and trade industries, including:

  • Tax returns
  • PAYG withholding reports
  • Activity statements
  • FBT returns
  • Annual GST returns
  • Payroll reports
  • Annual taxable payment reports

Lodging a tax return late, or failure to submit a return for multiple years can result in default assessment, which if ignored can lead to potential prosecution, and a higher risk of being reviewed or audited by the ATO.

Getting an FTL overturned

If you have received an FTL for late lodgement, based on a time penalty, the safest way to get it overturned is by using a registered tax or BAS agent like Linc Accountants. When your agent has been supplied with all your applicable tax information by the due date, an FTL cannot be applied.

Tax experts can help with how to lodge late tax returns and whether safe harbour applies for your specific situation. Overturning an FTL is based on either having a valid excuse due to extenuating circumstances (such as illness), but lodging outstanding returns is still required to show the penalty was unwarranted.

Lodge your late return accurately with Linc Accountants

With long-standing experience around tax compliance and lodging late returns, Linc Accountants are here to help.

Contact us today to engage help for your late income tax return, or to learn more about how to lodge a tax return for your business.