6 Oct

Tax Deadline Reminder: Avoid ATO Penalties for Late Lodgement

Small business owners and sole traders have until 31 October 2025 to lodge their 2024–25 income tax return, unless they are included in a registered tax agent’s lodgement program.

Failing to meet this deadline can result in automatic ATO penalties, delayed refunds, and potential compliance reviews — especially for businesses with tax payable or outstanding lodgements from previous years.

Lodgement Deadline: 31 October 2025

If you prepare and lodge your own return, the final lodgement date is 31 October 2025.

Businesses using a registered tax agent may be eligible for an extended deadline, often into May 2026, but must engage the agent and be added to their client list before 31 October.

If you do not register with a tax agent before this date, the standard ATO deadline applies.

ATO Penalties for Late Lodgement

The ATO applies a Failure to Lodge (FTL) penalty when a return is late.

The base penalty is one penalty unit ($330 as at 1 July 2025).
The penalty increases by one unit for every 28 days (or part thereof) that the return remains outstanding.
The penalty is capped at five units ($1,650) for individuals and small businesses.

The ATO may consider individual circumstances before applying a penalty. However, taxpayers with tax payable or a history of late lodgement are more likely to be fined.

Why Timely Lodgement Matters

For small business owners, lodging on time helps to:

Access refunds, credits, and carry-forward losses without delay
Maintain accurate financials for cash flow, planning, and lending purposes
Avoid penalties and interest on unpaid tax

Delays can lead to missed deductions, inaccurate claims, and cash flow pressure if unexpected tax liabilities arise.

How to Lodge

You can lodge your return:

Online via myTax through your myGov account (for simpler sole trader affairs)
Through a registered tax agent (recommended for businesses, trusts, or multiple income streams)
By paper return, though this may take significantly longer to process

Most electronic lodgements are processed within approximately two weeks.

Paper lodgements can take up to 50 days, delaying refunds and assessments.

If You Owe Tax

If your return results in a tax bill, payment is generally due 21 days after the issue date on your Notice of Assessment.

If full payment isn’t possible, the ATO offers payment plans. However, interest charges apply on outstanding balances, and failure to act may result in recovery action or garnishee orders.

Common Errors by Small Businesses

Late or rushed lodgements often contain avoidable errors, including:

Claiming personal or non-deductible expenses as business costs
Failing to declare side income, contract work, or digital platform earnings
Submitting unsupported or excessive deductions

The ATO uses data-matching across BAS, payroll, and bank transactions to identify inconsistencies. Every deduction must be substantiated and directly linked to your business income.

Stay Alert to Scams

As deadlines approach, scammers often impersonate the ATO.

Be cautious of unsolicited emails, texts, or calls claiming you owe money or are due a refund.

The ATO will never:

Request payment via gift cards, cryptocurrency, or prepaid debit
Threaten arrest or immediate legal action

If unsure, contact your tax agent or check your myGov account to verify any messages.

Final Reminder

If you haven’t yet engaged a tax agent, do so before 31 October to secure your extended lodgement deadline.

We help small business clients stay compliant, avoid ATO penalties, and optimise cash flow through proactive tax planning and lodgement management.

Next steps

We can help with navigating through the changes that may apply to your particular situation. For further discussion, please feel free to contact our office.