Have you ever found yourself in a situation where meeting tax lodgment deadlines seems nearly impossible? Whether it’s due to unexpected business challenges or personal circumstances, missing these deadlines can be stressful. 

But did you know there’s a way to ease this pressure? This is where lodgment deferrals come into play. But what exactly are they, and how can they help you?

Understanding Lodgment Deferrals

Lodgment deferrals are arrangements provided by the Australian Taxation Office (ATO) that allow businesses and individuals extra time to lodge their tax returns and other financial reports. 

Deferrals are typically granted in exceptional or unforeseen circumstances that impact the ability to lodge on time. The ATO closely monitors lodgment performance and may reach out to agents who frequently request deferrals or have high levels of non-compliance.

Eligible Obligations for Deferral

Deferrals can be requested for various obligations, including:

  • Tax returns, but only for tax agents.
  • Fringe benefits tax returns are also limited to tax agents.
  • Monthly and quarterly activity statements, applicable to both tax and BAS agents.
  • Annual GST returns and taxable payments annual reports are available for both tax and BAS agents.

When is a Deferral Not Needed?

You don’t need to request a deferral if the due date falls on a weekend or public holiday. Additionally, for tax returns due on 15 May, there’s an automatic extension to 5 June.

Types of Deferrals

The ATO assessed deferral requests based on the policy statement PS LA 2011/15. There are three types of deferrals:

  • Agent Assessed Deferrals: Suitable for first-time requests within 3 business days after the original due date and for existing clients. Not applicable to certain tax returns and substituted accounting period clients.
  • ATO Assessed Deferrals: For requests that don’t meet the agent-assessed criteria, including second or subsequent requests, or those involving exceptional circumstances.
  • New or Re-engaged Clients: This applies to new clients or those re-engaging with overdue returns, offering an additional 42 days from the request date.

Declined or Varied Requests

The ATO may decline deferral requests for various reasons, including a history of late lodgments, ongoing compliance actions, or if the agent is not authorised. Requests from significant global entities or large businesses are reviewed by large business specialists and may be declined or varied accordingly.

Applying for a Lodgment Deferral

Applying for a lodgment deferral is simpler than you might think, especially with the right support. Your Tax or BAS Agent is your go-to for efficiently filing deferral requests on your behalf. They can handle up to 40 deferrals at a time, ensuring that your business stays compliant without missing crucial deadlines.

Once a deferral request is submitted, your agent will receive a receipt ID for tracking. Outcomes are typically communicated within 48 hours for straightforward cases. More complex requests might take longer, especially during busy periods. Regardless of the outcome, your agent should keep you informed every step of the way to ensure your business’s lodgment obligations are managed seamlessly.

Lodgment deferrals can be a lifeline in managing your tax obligations during challenging times, and understanding how to navigate this process is crucial for maintaining compliance and getting your peace of mind!

Need help with lodgment deferrals or managing your ATO obligations? Contact Accounts All Sorted and we’ll be happy to ensure your financial responsibilities are met with ease.

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