Q. I have not lodged my tax return for the 2018-2019 tax year yet. What is the deadline for lodgement? I am a salaried full-time employee.
A. If you are over age 18, with a taxable income of greater than $18,200 and had tax withheld by your employer, you are obliged to lodge a tax return for the 2018-2019 financial year.
Due dates for lodging tax returns vary depending upon a range of criteria. If you are an individual lodging your own tax return for the 2018-19 tax year with myTax via MyGov or via a paper-based tax return, the deadline for lodgement is 31 October 2019. If your latest tax return resulted in a tax liability of $20,000 or more, then your tax return lodgement due date is extended until 31 March 2020.
If your tax return is being lodged via an Accountant who is also a Registered Tax Agent, for most individuals your due date will be 15 May 2020, but this concessional date only applies if any tax liability is paid in full by 5 June 2020. If you do not pay your tax by this date, overdue penalties may accrue from the earlier lodgement deadline.
If you have recently been late lodging your annual tax returns or have an overdue return, regardless of whether you use an Accountant or not, you may be obliged to lodge your return by 31 October 2019. If you want to qualify for the 15 May 2020 extension to lodge, you need to be registered as a client with an Accountant prior to 31 October 2019. If you have a bad lodgement history already and you have been advised that your due date is 31 October, if your Accountant lodges your return by that date, you may qualify again for the extensions from next financial year.
You may lodge your tax return at any time prior to your due date provided you have all documents you require to submit the return. Prior to 30 June 2019 you would have received a “Pay as you go (PAYG) payment summary” from your employer, from 1 July 2019, your employer is not obliged to provide these to you. As a result of the ATO obligation to move to Single Touch Payroll (STP), the issuing of PAYG statements, often referred to as a group certificate, is redundant. Employers now feed payroll data directly to the ATO with every pay run, including year to date data on employee earnings and tax withheld.
Employees will be able to access these reports real-time via their myGov account. The ATO will notify employees via e-mail when their income statement is available, to enable the completion of tax returns either by the individual or their tax agent.
From 1 July 2019, health insurers are no longer required to send their members a private health insurance statement. If you lodge your tax return online with myTax or via a registered tax agent, your health insurance tax information should be pre-filled in your tax return by 20 July.
If your health fund details are not pre-filled by 20 July, you may need to contact your health insurer to get a private health insurance statement so you can complete your income tax return. If you request a statement, your fund is required to send it to you within 14 days.
If your tax return for the 2018-19 tax year will result in no tax being paid or you are entitled to receive a tax refund, you have until 5 June 2020 to lodge your return.
Once a tax return is lodged, the ATO will issue you with a Notice of Assessment. Typically the payment due date for any additional tax will be the later of 21 days after the lodgement due date or 21 days after the Notice of Assessment is deemed to have been received by you.
Q. If I lodge my Tax return after the due date, what are the consequences and what penalties do I face?
A. The ATO is authorised under the law to impose penalties for late lodgement of a tax return.
The ATO will issue you a “Failure To Lodge” penalty if your tax return isn’t lodged by the due date. The penalty for late lodgement is calculated at the rate of one penalty unit for each period of 28 days or part thereof that the document is overdue, up to a maximum of five penalty units. The value of a penalty unit is currently $210, which makes the maximum penalty which can be applied for an individual $1050.
In addition to penalties, the ATO may levy a general interest charge (GIC) to overdue unpaid tax liabilities. The annual GIC rate from 1 October 2019 is 7.98% and is reviewed quarterly. The GIC compounds on a daily basis. You can apply for a remission of penalties and the GIC in part or in full if there are extenuating circumstances. Examples of extenuating circumstances would be ill health or natural disaster.
If you are having difficulties submitting your return on time, you need to advise the ATO before the due date.
If you have not lodged a tax return for a number of years and you are worried about the consequences, the best course of action is to bite the bullet and get all your outstanding tax returns lodged and your tax affairs up to date. Ignoring the problem will not make it go away and the problem will be compounding.
Non-lodgement of tax returns may impede your ability to borrow money from a bank or receive Commonwealth Government benefits. Engage a Registered Tax Agent to prepare the tax returns on your behalf and work collaboratively with the ATO.