The tax lodgement deadline – October 31st – is fast approaching. But who is it for? And what happens after you lodge?
Well, if you’re a sole trader who doesn’t have a registered tax agent (like Hnry) lodging on your behalf, or you have an outstanding tax return from a previous financial year, your lodgement deadline is likely the 31st of October.
This means you (or your tax agent) need to fill in and send through your tax return before this date, or you may incur a Failure to Lodge penalty. Yikes!
Worse still, if you then have an outstanding balance to pay on your taxes, you’ll be required to pay it within a certain time period. If you’re late paying that, the balance will start accruing interest that compounds daily.
Basically, when it comes to tax returns, the ATO doesn’t mess around!
All about the 31 October deadline
As we’ve already covered, the 31st of October lodgement deadline is for people who either:
- don’t use a registered tax agent, or
- have outstanding tax returns from previous financial years.
(Just so we’re crystal clear, “outstanding” here means overdue, not amazing or incredible. The ATO doesn’t hand out gold stars for tax-form brilliance, unfortunately.)
This deadline is for your tax return for the financial year that’s just been – eg. the tax return for the financial year ending 30 June 2024 would be due 31 October 2024.
If you do have a tax agent or accountant who lodges for you (like Hnry!), your deadline is likely extended to 15 May the following year – so 15 May 2025, for the previous example.
Penalty fees and interest
Just like the deadlines are fairly straightforward, so too are the penalties (unfortunately).
Failure to lodge by the due date
If you fail to lodge your tax return by the 31st October deadline, the ATO will warn you either by phone or in writing.
Then, if they decide to apply the aptly named Failure to Lodge (FTL) penalty, they’ll write to you again and tell you:
- the reason for the penalty
- the penalty amount
- the due date for the penalty (at least 14 days after they give notice).
The FTL amount will depend on how long overdue your tax return is. For small businesses, the fee is calculated as one “penalty unit” every 28 days. As of 1 July 2023, the “penalty unit” amount is $313. Partial penalty units may be included.
Basically, the sooner you get this sorted, the better!
💡 If you decide to get yourself a tax agent, remember to engage them before the 31st of October so you’re eligible for the tax-agent lodgement deadline of 15th May (so long as you don’t have any outstanding tax returns). Otherwise, you’ll be stuck with the October deadline and your lodgement may still be considered overdue! 🙋♀️ Thinking about joining Hnry? We can sort your overdue returns for a one-off fee.
Failure to pay an outstanding tax bills by the due date
Once you’ve lodged your tax return, you should know whether or not you have any outstanding tax left to pay. If you do owe money, the due date and amount payable will be provided in a Notice of Assessment issued by the ATO once they’ve processed your return.
If you miss this due date, the balance you owe will begin accruing something called General Interest Charge (GIC). The GIC rate is set quarterly, and is calculated on a daily compounding basis on the amount outstanding – so definitely something you want to avoid.
The only silver lining here is that (bizarrely), the ATO allows you to claim GIC as a tax deduction in the financial year it’s charged. But this definitely doesn’t mean that you break even. Seriously, avoid GIC at all costs (pun intended).
Make it simple by using Hnry
Sign up for Hnry we sort it all for you.
If you have outstanding tax returns, we can lodge them for you for an extra fee. All future tax returns will be lodged as part of the 1% (+GST) Hnry fee, capped at $1,500 +GST a year.
We also calculate and deduct all:
… meaning you won’t have to think about any of that. Ever.
Being a sole trader is hard enough. Hnry has your back. Sign up today, and never miss another tax deadline again.
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