Did you know that missing the 31 October tax deadline could cost you up to $1,650 in fines from the Australian Taxation Office (ATO)?
That’s right – even being one day late can trigger a penalty.
If you’ve missed lodging your tax return on time, you’re not alone, but the consequences can add up quickly.
This blog explains what happens when you file late, how penalties work, and what you can do about it.
What Happens If You Miss The Deadline?
The ATO sets 31 October as the deadline for lodging your annual tax return. Miss it, and you’ll face a Failure to Lodge (FTL) penalty. This fine starts small but grows the longer you delay.
Even if you didn’t earn income, you still need to tell the ATO with non-lodgement advice. Ignoring this can lead to extra costs, like General Interest Charges (GIC), on any tax you owe. Forgetting to file isn’t just a minor slip – it can hit your wallet hard.
Penalties kick in from the first day past the deadline. The ATO doesn’t wait long to act.
They might warn you by phone or letter, but if you still don’t lodge, the fines start stacking up. Tax accountants in Melbourne often see clients surprised by how fast these costs grow.
How Much Are The Penalties?
The annual tax return deadline in Australia is 31 October.
If you miss this crucial date without making alternative arrangements, you risk facing Failure to Lodge (FTL) penalties from the ATO.
These penalties start at $330 for being just one day overdue and can escalate significantly the longer you delay.
For individual taxpayers and small entities, the ATO calculates penalties as follows:
| Days Overdue | Total Fine Amount |
|---|---|
| 1 – 28 days | $330 |
| 29 – 56 days | $660 |
| 57 – 84 days | $990 |
| 85 – 112 days | $1,320 |
| 113 + days | $1,650 |
These penalties aren’t the only financial consequences you might face. The ATO also applies General Interest Charges (GIC) on any outstanding tax debt.
As of October- December 2024, this rate stands at 11.38% per annum, compounding daily. This combination of penalties and interest can quickly transform a manageable tax bill into a significant financial burden.
Which Lodgements Can Trigger Penalties?
The ATO applies FTL penalties to various late-lodged documents, including:
- Income tax returns
- Activity statements
- Fringe Benefits Tax (FBT) returns
- PAYG withholding annual reports
- Single Touch Payroll reports
- Annual GST returns and information reports
- Taxable payments annual reports
Generally, penalties may not apply to late-lodged returns that result in a refund or nil result.
However, there are exceptions to this rule, particularly if you’re classified as a large entity or if the FTL penalty was applied before you lodged the return.
How Penalties Are Calculated Based On Entity Size?
The ATO doesn’t apply the same penalty rate to everyone.
The size of your business or entity determines how severely you’ll be penalised:
| Entity Size | Penalty Multiplier |
|---|---|
| Small entities | Base Rate[1x] |
| Medium entities | 2× base rate |
| Large entities | 5× base rate |
| Significant global entities | 500× base rate |
A medium entity is classified as a medium withholder for PAYG withholding purposes or as having assessable income or current GST turnover between $1 million and $20 million.
Large entities are those with an assessable income or GST turnover of $20 million or more.
If you’re uncertain about your tax obligations, consulting with qualified tax consultants can help you understand your classification and potential penalties.
Why Does The ATO Charge These Fines?
The ATO uses penalties to make sure everyone meets their tax duties. Late filing slows down their system and delays revenue collection.
Fines encourage you to lodge by the deadline or at least tell them if you don’t need to file.
For big companies, especially significant global entities, the penalties are much higher – up to 500 times the base amount – because their delays have a bigger impact.
Can You Avoid Or Reduce The Penalties?
Yes, there are ways to dodge or lower these fines.
If you hire the best tax accountant in Melbourne and give them all your info on time, you might qualify for a safe harbour.
This means no penalty if the agent messes up, as long as they didn’t ignore the law on purpose. You’ll need proof you handed over your details before the deadline.
Another option is requesting remission. After you lodge your overdue return, you can ask the ATO to cut or cancel the penalty.
They’ll look at your situation – things like illness or natural disasters might convince them. A tax return agent can help you write this request. Just know that remission isn’t automatic; it depends on your reasons.
Late On Your Tax Return? Let Us Fix It!
Did you miss the 31 October tax deadline and worry about penalties? Don’t stress – KPG Taxation can help you sort it out fast! Our expert tax consultants, including accountants in Melbourne, know how to deal with late filings and cut your fines.
With quick service, a promise of maximum refunds, and offices all over Australia, we make tax easy.
