There are few worse feelings than looking at the calendar and realising it’s 1 November — and you haven’t lodged your tax. If your clients find themselves in this predicament, here are four tips to be aware of, according to Chartered Accountants ANZ tax leader Susan Franks.
1. Apply for extension
Accountants can help Australians obtain an extension on their tax deadline, Ms Franks said.
“While individual tax returns are due on 31 October, if you are lodging through an accountant, you will be entitled to a longer period — subject to your lodgement history,” she explained.
“If you have left your tax to the last minute, then speak to your local chartered accountant by 31 October and you might just be eligible for the extension.”
2. Remember late lodgement beats no lodgement
While a late payment could be punished by the ATO, the longer an individual waits, the worse the penalty could be.
If your tax return isn’t lodged by the due date, you could receive a failure to lodge penalty which, if left for too long, can equate to a maximum of $1,110.
“If you have a late tax return, don’t sit on it — lodge it. By doing this, you will prevent interest and fines accruing. Delaying lodging your tax return can make it more difficult to obtain tax payment plans with the ATO,” Ms Franks said.
3. Consider opting for a payment plan
Individuals are being advised to consider a tax debt payment plan.
“The ATO is usually willing to help out with a tax debt payment plan — provided you lodge your tax return genuinely,” Ms Franks said.
“Anyone struggling with the financial impact of COVID-19 should discuss this with the ATO or your chartered accountant.”
4. Maintain communication with the ATO
Accountants can advise clients to expect a call from the ATO if they have failed to lodge.
It is important that accountants advise clients that they respond to this communication accurately and promptly to avoid stronger action being taken, Ms Franks advised.