How to deal with Late or Overdue Tax Returns

How to deal with Late or Overdue Tax Returns

Late Tax Return? If you haven’t lodged tax returns for years, we will help you bring everything up to date. Below is the information you need to know about late tax returns.

Do I need to lodge a tax return if I didn’t earn much income?

Most likely the answer is Yes! Lodging a tax return is mandatory in Australia (in most cases). Without your tax return, the ATO cannot conduct an assessment for your income tax liabilities. Essentially, by lodging your tax return, you are informing the ATO about your income and other relevant information. If you are in an exemption category in a financial year (e.g. you have nil income), you still need to update your information with the ATO. It is important to lodge the update before the due date of your tax return to avoid fines.

How much are the penalties or fines for late tax returns?

The ATO applies a “failure to lodge on time penalty” (FTL) to overdue tax returns or activity statements (BAS or IAS). The FTL is typically up to $900 on each late return / activity statements for individuals and small businesses and $4,500 for large businesses. Additionally, if the overdue tax return results in additional income tax payable, a General Interest Charge (GIC) may be applied at a rate of 10%-14% per year compound. In many cases, the GIC is higher than the FTL. The ATO is more likely to apply a penalty if:

  • You have more than one tax return outstanding
  • You have a poor lodgement history, or
  • You have not complied with a request to lodge your tax return

Can the penalties be reduced?

Yes. In special circumstances, the ATO may reconsider reducing or remitting the penalties and interest charges after you have lodged all outstanding returns and statements. These circumstances include, but are not limited to:

  • You have a refund available from the tax return instead of owing tax
  • You have significant personal or domestic difficulties beyond your control
  • You have a severe illness, or you were caring for another person who was sick with a severe illness
  • You were involved with a natural disaster
  • Other appropriate circumstances considered fair and reasonable

Some of the factors you need to consider prior to applying the FTL penalty are:

  • The compliance history of the entity.
  • The effort it took to obtain lodgement.
  • The value of the information to be disclosed in the taxation document.
  • Whether the entity is aware of their lodgement obligations and the consequences involved in not meeting their obligations.
  • Whether the entity had an opportunity to comply.
  • The length of time the taxation document is overdue.
  • Any contact the entity or their representative may have had with the ATO prior to the due date for lodgement.

This list is not exhaustive.

At AIMS Australia Tax Accountants in Melbourne, we specialise in late lodgements. We will assist you not only in lodging your outstanding tax returns, but also in minimising your FTL and GIC charges. We have a proven track record of highly successful FTL and GIC compliance rates. Please contact AIMS Australia’s highly experienced and qualified tax accountants to help you get your taxes up to date.

What if I don’t have all my group certificates / PAYG Summaries?

AIMS Australia tax accountants can help you. With your authorisation, we can check your lodgement status with the ATO, ascertaining which years are outstanding and accessing details which have been reported to the ATO. Usually the ATO holds your salary, interest, dividend and other income details for the past 10 years.

Further, by completing your outstanding tax returns, our accountants may also find your past entitlements for benefits such as baby bonus, education tax refund, family payment, and more. We also offer a convenient no-up-front-fee service and deduct your fee from your refund. It is important to understand your lodgement obligations and ensure you are up to date with your tax returns. At AIMS Australia, we understand this can be stressful at times, that is why we are here. Talk to one of our friendly team members and let us take the burden of your tax worries.

Contact us today by sending us an email to

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