ATO has the final word on lodgement deferrals
The Tax Office will not grant further extensions to lodgement due dates but will meet the profession halfway by not imposing late lodgement penalties up to the end of the financial year.
Despite the best efforts by the professional accounting bodies, the ATO has chosen not to grant a blanket deferral for lodgement and payment due dates beyond automatic deferrals that it had previously implemented.
However, in a new concession, the ATO will not apply late lodgement penalties if a return is lodged by 30 June 2020.
Tax agents unable to meet the lodgement due date will also not see their 85 per cent on-time lodgement performance requirement impacted, and will not lose access to the lodgement program.
General interest charge (GIC) for debts that are not paid by the stated due date will still be applicable, however, with agents able to apply for remissions on a case-by-case basis.
“Our partnership with the tax profession is more important than ever as we continue to work together in response to the impacts of COVID-19,” said ATO deputy commissioner Hoa Wood in an open letter to the profession.
“We know it has been a challenging time for you and appreciate your hard work and patience as we work to deliver the stimulus support measures.
“We want to reassure you that if you are unable to meet all your lodgement program obligations, our approach is to support you and your clients.”
CPA Australia’s Paul Drum believes the announcement will not go down well for some practitioners, including those with smaller practices that were inundated with clients’ stimulus package requests.
“Tax practitioners’ disappointment will be palpable,” Mr Drum said.
“From our most recent dialogue with the department, we were hoping for a general remission of penalties including the general interest charge as a minimum.”
However, Tony Greco from the Institute of Public Accountants believes practitioners also have to take the ATO’s perspective into account.
“The ATO doesn’t want to give everyone a free kick. If they basically said everyone will get a lodgement extension, those who could meet the 5 June deadline would not lodge if their client had a debt,” Mr Greco said.
“I think we have to understand that predicament, and I think we have to understand their side of the coin as well.”
For Mr Greco, he’s grateful that the ATO has chosen to extend a further concession around lodgement penalties.
“We’re thankful on behalf of the profession for the acknowledgement of the heavy lifting done by the profession and that this is something that the government has imposed on the profession over and above our usual work and this gives us some recognition,” he said.
“We weren’t expecting any movement, so we’re very glad that they have met us in part, and I think that’s all we can ask for.
“On balance, what they are offering us is the best we could ask for and we have to be reasonable.”