Australians who miss the October 31 tax lodgement deadline can still avoid penalties by engaging a registered tax agent. According to the Australian Taxation Office (ATO), individuals who use a registered tax agent can have their return lodged as late as May 15 of the following year without incurring a failure-to-lodge penalty.
How the Extension Works
The ATO allows registered tax agents to lodge returns for their clients on an extended timeline. To qualify, taxpayers must be on the agent's books before October 31. The agent then sets a lodgement program, typically extending the deadline to May 15. This applies to individuals lodging their own returns through an agent, not to businesses or self-managed super funds.
Tax agent fees are deductible, and the cost varies. The ATO emphasizes that using a registered agent ensures accuracy and compliance. As of 2023, over 70% of individual taxpayers used a registered tax agent, according to ATO data.
Penalties for Missing the Deadline
If you miss the October 31 deadline and do not use a registered agent, the ATO may issue a failure-to-lodge penalty. The penalty is one penalty unit (currently $313) for every 28 days the return is overdue, up to a maximum of five penalty units ($1,565). However, the ATO may remit penalties in certain circumstances, such as illness or natural disaster.
ATO Assistant Commissioner Tim Loh said, "If you're not able to lodge by October 31, the best thing you can do is talk to a registered tax agent. They can help you get an extension and make sure you get your return right."
Steps to Secure an Extension
To secure an extension, find a registered tax agent before October 31. Provide them with your income and deduction information. The agent will then lodge your return under their lodgement program. Even if you miss the October 31 deadline, you can still engage an agent, but you may incur a penalty for the period between October 31 and the date you engage the agent.
The ATO's website has a search tool to find registered agents. Most agents charge between $100 and $300 for a standard individual return, depending on complexity.
Impact of Not Lodging
Failing to lodge a tax return can lead to more than just penalties. The ATO may issue a default assessment, which could result in a higher tax bill and loss of deductions. Interest charges apply to any tax owed from the original due date. In extreme cases, the ATO can take legal action.
According to the ATO, as of June 2024, there were approximately 1.5 million individuals who had not lodged their 2023 tax returns. Using a registered agent is the most common way to manage the deadline.
Why Use a Registered Agent
Registered tax agents are qualified professionals who are regulated by the Tax Practitioners Board. They can provide advice on deductions, offsets, and structuring. The ATO encourages taxpayers to use agents to reduce errors and ensure all entitlements are claimed.
"A registered tax agent can help you navigate the tax system and ensure you're not missing out on deductions," Loh added. "They also take the stress out of meeting deadlines."
