A few steps to help you find your way through overdue tax returns.
Obligations relating to tax and the slight discomfort they can cause are universal. It is quite evident that growing businesses tend to focus on developing their business and can tend to lose sight of tax returns that need to be updated regularly throughout the year. The regular updates leave you with plenty of time at the end of the financial year to review all the paper work. However, such ideal situations are bound to be subject to human error. There are a few ways to deal with an overdue tax return and they include:
- Dodging the late payment interest rates
There is a legal and a widely accepted method of saving your company from the late tax repayment interest rates. The cost can be reduced by simply making a contribution before lodging for an overdue tax return. Companies can choose to pay partially or in full, the amount that they owe to the ATO before lodging the papers for the overdue tax return. This way the late company tax is not subjected to the penalty interest rate.
- Get a qualified tax agent on your side
When your company is dealing with an overdue tax payment it can make things easier if you seek the assistance of a qualified tax accountant. Tax accountants are in a great position to analyse your situation from a distant perspective, allowing them to gauge your situation pragmatically and offer sound advice. They can help to negotiate extensions for payment due dates and can submit the company’s tax return through what the ATO refers to as the Safe Harbour Exemption. The Safe Harbour Exemption allows the company to steer free of penalty or additional charges if the tax agent has delayed the lodgement.
- Simply call the ATO
While the top two could be seen as reactive methods of dealing with overdue tax return, a preventative method would be to simply inform the ATO about the overdue company tax return with a sufficient reason. The ATO can be compassionate towards businesses that are going through rough patches, and might be able to extend the date for your company.
It’s always advisable to avoid situations of overdue tax returns. However, if you do land up in such a spot, it would be best to get professional help.