Aussies warned ATO is ‘not mucking around’ this year, as tax deadline looms
Time is running out for millions of Australians to lodge their tax return, with a particular warning being issued to those with tax debts this year.
Aussies who fail to complete their tax return within the next few days may be in for a scary surprise at the end of the month – and no, it’s not Halloween.
Taxpayers have until October 31 to submit their return to the Australian Taxation Office (ATO), with an extension available to those lodging through a tax agent and are on their books by the deadline.
Those who miss the cut-off date could be slapped with a $330 fine for every 28 days their lodgement is late, with a maximum penalty of $1650.
For those thinking they might be able to fly under the radar with late lodgement, a tax agent has warned them to think again.
Speaking to news.com.au, Tax Invest Accounting director, Belinda Raso, said the ATO won’t be offering any leniency this year.
MORE: ‘Legit’ Aussie tax secrets revealed
“In previous years, the ATO have stated that if you’re getting a refund, they generally won’t impose a failure to lodge penalty … but there’s been a sharp increase in the amount of taxpayers that have actually been penalised the failure to lodge,” she said.
“We’re talking over 50 per cent. … it was nearly a million dollars worth of failure to lodge penalties were actually charged to taxpayers (last year).
“They’re not mucking around.”
On top of this, only 18.18 per cent of the people who tried to get their penalties remitted were successful in doing so, with this figure halving from the previous year, Ms Raso said in a recent social media video.
“I wouldn’t want to tempt fate,” the tax agent warned.
Earlier this month, the ATO revealed that over two million taxpayers were yet to lodge their tax returns, despite the deadline fast approaching.
MORE: A guide to the average salary in Australia
Ms Raso told news.com.au one of the main reason many Aussies fail to submit their returns before the deadline was because of tax debt.
Many people assume the longer they put off submitting it, the longer they will have to pay the debt.
This is a myth and can actually result in people owing even more to the tax office when they get hit with late lodgement fees.
“You’re required to pay within three weeks of lodging,” Ms Raso said.
“Ninety per cent of people not lodging on time is because of tax debts, which are more prevalent the past couple of years.”
She said one of the major reasons more people are being hit with tax debts is because an increasing number of Aussies now have more than one job.
Ms Raso said a fault in the payroll system has left Aussies who have taken on extra work vulnerable to accumulating tax debt without realising.
Australian residents are entitled to the tax-free threshold, which means you pay no tax on the first $18,200 of your income.
It can only be claimed for one job, and for any additional jobs Aussies must inform their employer they will not be claiming the threshold.
However, even when not claiming the tax-free threshold, Ms Raso claimed many payroll systems automatically place people into the second tax bracket, which hovers between 16 to 18 per cent, she said.
For those who make over $45,000 a year through their main job, they will be automatically placed in the 30 per cent bracket, not the first level that not claiming the tax free threshold takes you to, Ms Raso added.
This results in a 14 per cent difference, which then causes people to accumulate tax debts without even realising it.
This hasn’t been as significant an issue previously, because fewer people were working multiple jobs and there was the buffer of the low and middle income tax offset.
“We’ve got this ingrained issue that we’ve never seen before,” Ms Raso said.
“Society has changed, our payroll systems haven’t caught up and if we can just once and for all fix this issue, we’re not going to have that problem (and many) people won’t get this tax debt at the end of the year.”
