Failing to Lodge Your Tax Return on Time: The ATO Is No Longer Playing Nice

Lodging a tax return is not just a financial task—it’s a legal responsibility for all Australian residents for tax purposes. The Australian Taxation Office (ATO) closely monitors tax return lodgements and, in recent years, has become increasingly impatient with late lodgers—especially repeat offenders. We understand that lodging a tax return is often the last thing on your mind. Whether you’re a time-poor professional, a high-net-worth individual juggling multiple properties and investment portfolios, or a small business owner working around the clock to keep things afloat—tax can easily slip down the priority list. But delaying lodgement can come at a cost, and the ATO is no longer turning a blind eye. In this article, we explore the real-world consequences of failing to lodge on time and why taking control of your tax obligations should be a priority—not an afterthought.

Your Tax Lodgement Obligations: What You Need to Know

Lodging your tax return on time isn’t just a one-off task—it’s part of a broader set of ongoing tax obligations that vary depending on your circumstances. If you’re an individual or a property investor, your annual income tax return must report all sources of income, including salary, rental income, capital gains, and investment earnings. Business owners, on the other hand, have more frequent and layered obligations such as Business Activity Statements (BAS), Instalment Activity Statements (IAS), and, in some cases, Fringe Benefits Tax (FBT) returns.

Each of these lodgements comes with its own due date. Individuals lodging their own tax returns must do so by 31 October, whereas those using a registered tax agent may be eligible for an extension to May of the following year. BAS is typically due quarterly or monthly, with slight deadline extensions available when lodged through an agent. FBT returns are due by 21 May, or 25 June via a tax agent, and business tax returns generally fall between February and May, depending on the entity type and lodgement history.

Using a tax agent not only gives you access to extended lodgement dates, but also helps you navigate changing ATO rules. It’s important to note that not all individual tax returns are now due in May of the following year. The ATO has recently moved up some lodgement deadlines to as early as 31 March or mid-April, especially for clients who had tax payable in prior years. This means you can no longer assume you’ve got extra time just because you’re with a tax agent. To avoid penalties and other consequences, it’s crucial to have regular conversations with your accountant about your specific due dates. A one-size-fits-all approach no longer applies.

Lodgement Deferrals Are No Longer Automatic

Many clients who work with registered tax agents have become accustomed to the idea that their tax agent can automatically access a lodgement deferral beyond the standard due dates—typically from 31 March to 15 May of the following year. In the past, the ATO granted blanket extensions to all clients under a tax agent’s lodgement program. However, over the last couple of years, this is no longer the case. The ATO has tightened its approach and now requires individualised deferral requests to be submitted for each client. Extensions are no longer automatic—they’re only granted where genuine and exceptional circumstances can be demonstrated, such as illness, natural disasters, or serious disruptions. This shift means both clients and tax agents must be more proactive and organised, as the ATO now expects timely lodgements unless a valid reason is formally approved. If you’re relying on a deferral, it’s crucial to speak with your accountant early to avoid unexpected penalties or compliance issues.

ATO Penalties Are Becoming the Norm, Not the Exception

For many years, the ATO took a relatively soft approach to late lodgement, particularly for individuals who were only a few weeks or a month behind. But that’s rapidly changing. In recent years, we’ve observed a significant increase in automatic late lodgement penalties, even for small delays. The ATO now issues Failure to Lodge (FTL) penalties based on the number of days overdue, with penalty units applied in 28-day increments. Currently, the penalty is $313 per unit, and individuals can be charged up to five units, totalling $1,565. For most late individual tax returns, we typically see penalties ranging from $350 to $1,550, depending on how late the return is and the taxpayer’s prior compliance history.

These penalties are applied per document—so if you’ve missed multiple tax returns, BAS, or IAS statements, the fines can quickly multiply. 

Late Lodgement Can Cancel Your Extended Due Dates

Another often-overlooked consequence of late lodgement is the loss of access to the agent-assisted lodgement program. Normally, when you work with a registered tax agent, you’re granted extended deadlines—sometimes as late as 15 May of the following year. However, this privilege is not guaranteed. If the ATO identifies a pattern of late lodgements—particularly where tax is payable—they may revoke your eligibility for those extended dates. In practice, this means your future tax returns will revert to the standard 31 October due date, even if you’re still lodging through a tax agent. To regain access to the deferral, your tax agent must apply for an extension on or before 31 October—and approval is not automatic. It’s another reason why staying on top of your lodgement history is critical to maintaining flexibility and avoiding compliance pressure.

Late Lodgement Also Attracts Interest Charges

In addition to penalties, late lodgement can also lead to General Interest Charges (GIC) being applied to any unpaid tax amounts. The ATO begins charging interest from the original due date of the return or payment—not from when you actually lodge. This means that even if you submit your return a few months late and pay the tax shortly after, interest has already been accruing in the background. The GIC rate is adjusted quarterly and is compounded daily, which can cause the amount to grow quickly—especially for taxpayers with significant tax liabilities. The longer the delay, the more you pay, even if you eventually bring everything up to date. For individuals, investors, and business owners with larger tax bills, these interest charges can quietly erode cash flow and add unnecessary financial pressure. That’s why timely lodgement isn’t just about avoiding penalties—it’s about protecting your bottom line from accumulating interest.

Conclusion: Stay Ahead to Stay Compliant

Failing to lodge on time is no longer something the ATO overlooks. With increased penalties, shortened lodgement deadlines, and accumulating interest charges, the consequences can be both immediate and long-lasting. Whether you’re an individual taxpayer, a busy professional, a property investor, or a business owner, staying on top of your tax obligations is essential to protecting your financial wellbeing and avoiding unnecessary stress. At Investax, we help clients stay ahead by sending multiple reminders via our regular newsletters and providing proactive, personalised support throughout the year.

If you’re unsure about your due dates or need help getting back on track, contact the team at Investax today.

We’re here to simplify the process, manage ATO correspondence on your behalf, and help you avoid costly surprises.

We offer a 15-minute free consultation to discuss your tax, property investment and business needs. Book your complimentary consultation now.

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