What Happens If You Lodge a Company Tax Return Late?

To keep your business financially sound and compliant, you must file your taxes on time. If businesses in Adelaide and all throughout Australia don't reach the deadline, they could have to pay large fines and interest and have troubles with the ATO.

This guide will explain exactly what happens if you submit your business tax return late, what kinds of penalties you can face, how interest is calculated, and what you can do to avoid or lessen the effects.

1. What is the deadline for a company tax return?

In Australia, the Australian Taxation Office (ATO) sets certain dates by which companies must file their tax returns. If you're doing your taxes, your due date will be different from if you're working with a licensed tax agent:

• Businesses that file their taxes must pay by February 28 of the year after the financial year closes.
• If you sign up with a tax professional before October 31 of the year before last, you might get more time, usually until May 15.
• Outstanding returns from years past: The new due date for returns that are past due from previous years is 31 October.

 If you don't plan ahead and meet deadlines, your tax return will be late, and you could be in trouble.

2. What Happens If You File Your Taxes Late?

The ATO fines a company a Failure to Lodge (FTL) cost if it doesn't file its taxes on time. This fine is based on penalty units, which change from time to time.

The ATO's Current Penalty Structure (2025)

• The price of one penalty unit is $313.
• Small firms must pay at least $313 every 28 days (or portion of it) for FTL.
• You can only be punished up to five penalty units, which is $1,565.
• If your firm files its return 65 days late, you will undoubtedly have to pay $939 (3 × $313).

Businesses that produce more money or have a GST turnover of more than $1 million may have to pay multipliers (up to 5×), which can add up to more than $7,800 in fines.

3. GICs (general interest charges) from the ATO for late payments

If your business doesn't pay its taxes on time, the ATO will impose General Interest Charges (GIC) on you in addition to FTL penalties. This interest grows every day and adds up every three months.

Important information:

• The GIC is based on the stated rate, which is about 11.15% per year as of July 2025.
• It starts with the date the first payment was due.
• GIC will no longer be tax-deductible after July 1, 2025. This will make late payments more expensive.

This implies that interest will keep accumulating up until the full amount is paid off, even if you file your taxes and pay them. It will cost you more the longer you wait.

4. Effects that go beyond fines

The most obvious effects of filing your taxes late are penalties and interest costs, but there are more concerns that don't have to do with money:

• Loss of ATO benefits: If you don't meet deadlines, tax agents may not be able to help you file your taxes on time in the future.
• ATO investigation: You might have to go through more audits or reviews if you file your taxes late more than once.
• Getting money is challenging: When lenders look at business loan applications, they usually want to see the most recent tax data.
• Damaged history of compliance: This can make it harder to negotiate payment plans or extensions with the ATO.
• Taking legal action: The ATO may sue you to get your money back if you don't follow the guidelines.

5. Can you ask for a penalty to be dropped?

Yes, the ATO permits businesses to ask for a penalty remission, especially if this is the first time they've been late or if there were unusual circumstances, like

• Disasters in nature
• Sick with something awful
• Problems with the system
• Change in how the business is run

To ask for a pardon:

Contact the ATO directly or

Please request your tax agency, such as Ashmans Accounting, to submit the necessary forms on your behalf.

6. How to Avoid Penalties for Filing Your Taxes Late

The best way to go is to be proactive about compliance. Here's how to stay on track:

• Hire a tax agent who is registered. This step gives you additional time to file your taxes and makes sure you obtain support from someone who knows how to follow the intricate requirements.
• Set up your calendar to automatically send you reminders: Write down significant dates on your calendar well in advance.
• Keep your financial information organised. The easier it is to find your data, the faster you can file your taxes.
• Get ready to pay your taxes: Make a plan for your budget every three months for things you know you'll need to pay for.
• Talk to the ATO right away: Please inform the ATO or your accountant promptly if you foresee any potential delays.

In conclusion, Ashmans can assist you in maintaining compliance.

Don't panic if your business is about to miss a deadline or has already done so. We help businesses in Adelaide by:

We can assist you in avoiding paying too much in penalties if you have to submit your taxes late.

• The ATO will talk to you.
• Make plans to pay your taxes.
• Prevent compliance issues from arising in the future.

We are experts in accounting for small businesses and can help you stay compliant and sure of yourself, no matter what stage your business is in.

Need help with your business's taxes? To make tax season easier, please contact Ashmans Accounting ASAP.

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