Keeping your tax affairs in order is usually the last thing on your mind when you’re building a client’s house or fixing a drain pipe. But if you’re a small business owner or an independent contractor, your bookkeeping, tax, superannuation, and BAS returns are just as much a part of your job as securing the scaffolding.
Today’s blog is here to help anyone who’s ever missed a year’s lodgement or has an overdue tax return. And if you get the feeling we are targeting people in trades you’re absolutely right. Sorry tradies, but you guys do have a bit of reputation.
We’re not here to judge or make your life any harder. We’re here to provide some uncomplicated advice for reducing your stress and getting your tax affairs completely up to date. After all, we know you want to spend your downtime having fun and relaxing with the family — not worrying about a tax return from two years ago.
Getting clear about overdue lodgements
Before we get started, let’s clarify a few things. When we are talking about:
- Overdue tax returns — we mean your latest tax return, and it’s overdue.
- Missed lodgements — we mean a tax return from (say) 3 years ago (or a couple of them) that has never been lodged.
- Non-lodgement year — we mean a year where your business revenue was under the threshold (currently $18,200) and you weren’t required to lodge a tax return — BUT you still need to send in a non-lodgement advice form.
Tradies overdue tax returns
If your latest tax return is overdue you want to get it sorted out as soon as possible. Even if it’s only a few days late, you could still be liable for fines and interest payments — but that will depend on the size of your business, how much tax you owe, and whether you have a history of late lodgements.
There are so many reasons why your tax return may have fallen behind schedule, but it’s important to remember that every situation can be sorted out with the taxation office. The sooner you get it lodged, the sooner you can put it behind you.
DID YOU KNOW? POP offers a bulk discount when doing multiple years of tax at once? Enquire today to get affordable and quality tax services for your business
Missed year lodgements
Once a return has been overdue for a few years, your reporting options change. You can submit a missed tax return or non-lodgement advice form by:
- Online lodgement — from tax years 2016 onwards. You can use the myGov portal.
- Paper lodgement — anything before 2016 you’ll need to fill out a paper form and post it to the ATO. You can download the appropriate year’s tax pack from the ATO website or make a phone call and have them post it to you.
- Registered Tax Agent — a Registered Tax Agent will review your bookwork, organise the correct forms, and lodge on your behalf. Even better, they can negotiate with the tax office and arrange payment plans or penalty reductions.
A Registered Tax Agent is always your best option as they will be able to find out directly from the ATO exactly which tax returns are missing — and they’ll make sure you are claiming all your deductions.
Overcoming late tax return stress
Just knowing there’s an overdue tax return out there can cause you a great deal of stress and anxiety. Usually the stress of a missed lodgement (and worrying about the fines) perpetuates the problem and you start avoiding your paperwork — sometimes for years.
We’re not going to bang on about the accumulated penalties and interest — you already know about that. Let’s talk instead about the way forward. Because there’s always a way forward.
|Problem||What’s happening now||The way forward|
|Bookkeeping overwhelm||You’ve been so busy trying to keep the business afloat and with family commitments your bookkeeping has fallen behind.||Get your bank accounts reconciled up to date, outstanding BAS submitted and prepare your tax returns. Plus claim you ALL your deductions.|
|Lost receipts and missing bank statements||A lot of the paperwork has been lost or faded. Bank statements are no longer available online.||Getting a registered BAS Agent or Tax Accountant to walk you through your business expenses and help you retrieve those missing documents.|
|Cash flow problems||Unexpected expenses came up and you used the tax money to pay for them.||Get a registered Tax Agent to negotiate an affordable payment plan to reduce your tax debt.|
|Personal hardship||Your business and personal affairs have been affected by bushfires, COVID-19, illness, or injury.||Getting a registered Tax Agent to liaise with the ATO on your behalf and negotiate a reduction in penalties (plus a realistic payment plan) — based on your unique situation.|
Don’t leave it any longer
Are you ready to take a step forward and get your bookwork up to date — and your tax returns lodged? Get in touch with POP, we’re experienced tax professionals who assist tradies overdue tax return with their accounting and tax Australia wide.
Imagine how great next weekend is going to feel knowing your tax and books are finally sorted. Book a free consultation today.
If you need any help, please contact us.