Lodge on time and avoid the sleepless nights knowing the Tax Man might come calling.
31 October is the first tax return deadline for the year and it is fast approaching!
So who does it apply to and why is this one extra important?
You Don’t have an Accountant / Tax Agent
If you don’t have an Accountant or Tax Agent, your tax return is due on the 31st of October. That includes all taxpayer types (individuals, companies, trusts, partnerships, super funds, etc).
The good news is, if you appoint an Accountant before the due date, and your previous years’ returns are in order, the 31 October due date will no longer apply and you can access the Tax Agent extended lodgement program giving you many more months to lodge..
Your 2020 Tax Return Was Lodged After 30 June 2021
If your last return was lodged after 30 June 2021 (meaning it was late obviously), your 2021 tax return will be due early this time around, being on 31 October (unless special relief has been approved by the ATO, contact us to discuss how you might access the relief)!
And on this occasion, it is extra important to lodge on time, because otherwise you will have two black marks against your name in the space of two tax years, and this can affect dealings with the ATO in future.
Your tax is also due on the 31st (again, earlier than usual), so interest will start to apply to late payments.
Your 2020 Tax Return is Still Outstanding
Obviously, you are already in the ATO’s bad books and likely staring down the barrel of penalties and interest on any unpaid tax.
And so as above, your 2021 is also due on 31 October.
If you miss this next deadline as well, the chances of more late lodgement penalties being applied is significantly increasing. As is the likely of further recovery action by the ATO.
Your 2021 tax will also now be due to be paid by the 31st, so if not paid, interest will start accruing from that date (much earlier than is normally the case).
Not to mention negotiations with the ATO in future will become increasingly difficult.
If this is you, don’t forget, lodging your tax returns is a legal requirement, and failure to do so can lead to criminal prosecution in addition to penalties and interest. It will also affect things like your ability to borrow money from banks, accessing Centrelink benefits, and for some professions it can impact your good standing.
Consequences for Tax Agents of Clients Who Lodge Late
For those that aren’t aware, Tax Agents are assessed by the ATO based on the number of Clients that lodge on time, and the number that don’t. So for each Client that lodges late, the Tax Agent gets a black mark against their name.
It is important to keep this in mind, as it does lead Tax Agents to have to cease acting for certain Clients where they are repeat offenders and they are impacting the Tax Agents standing with the ATO.
So for your sake, and that of your trusted adviser, get your work in as soon as you can and allow your Tax Agent to keep you both in the ATO’s good graces.
Small Extension for 2021
By the way, if you hadn’t noticed already, 31 October falls on a weekend this year. So that actually means you have until Monday the 1st of November to lodge and be considered on time!