Every September we field the same phone call. Someone has spotted a reminder about the 31 October tax deadline, realised their paperwork is in a shoebox, and started to panic.
To show how this plays out in practice, here's a short, entirely fictional composite scenario. "Dan" is not a real client — he's a made-up example built from the kinds of situations we see every spring, and nothing here describes an identifiable person or business.
Meet Dan: a Hoppers Crossing PAYG employee with a side hustle
Dan works full time as a warehouse supervisor in Truganina. On weekends he does a bit of paid delivery driving and rideshare work. He's got a small investment property in Tarneit that he bought with his sister, and a share portfolio he mostly ignores.
Dan hasn't lodged a return since the 2022–23 year. He kept meaning to. Then the rental property settled, then the baby arrived, then the shoebox got heavier and the job got harder to start.
In late September he gets a text reminder about 31 October and calls us.
What 31 October actually means
31 October is the deadline to lodge your own individual income tax return for the year ended 30 June — if you're lodging it yourself. It's not the deadline for everyone.
If you use a registered tax agent, you generally get a later due date under the ATO's lodgment program — for many individuals that pushes lodgment into the following year, sometimes as late as May. But there's a catch that trips people up constantly:
- You have to be on the agent's client list before 31 October to access the extended dates. Ringing an accountant in February doesn't retroactively grant you an extension.
- Concessional dates generally don't apply if you have prior-year returns outstanding. The ATO's lodgment program is a privilege for taxpayers who are up to date. If you've got old returns sitting there, expect the standard 31 October date to apply.
That second point is Dan's problem. He's three years behind, so the extended agent dates aren't automatically his to use.
The penalties: how failure to lodge on time works
The ATO can apply a failure to lodge (FTL) on time penalty when a return is lodged after its due date. For individuals and small entities it's calculated in penalty units, accruing for each period of 28 days (or part thereof) that the return is late, up to a capped maximum number of periods.
Penalty unit values are set by legislation and have increased several times in recent years, so we won't quote a dollar figure here — your accountant can confirm the current rate. The important structural points are:
- The penalty applies per late return, not per taxpayer. Dan has three outstanding years, so there are three potential exposures.
- It accrues in 28-day blocks, so a return that's six weeks late sits in a different bracket to one that's six days late.
- The penalty amount steps up for medium and large entities — small business and individuals sit at the base rate.
And then there's the interest
Separate from FTL penalties, the ATO charges general interest charge (GIC) on unpaid tax debts. GIC is calculated daily, compounds, and the rate has been sitting well above typical commercial lending rates.
There's an important change here that Dan needed to hear: from 1 July 2025, GIC and shortfall interest charge (SIC) are no longer deductible for income tax purposes. Previously, a business carrying an ATO debt could at least claim the interest. That's gone. An ATO debt is now genuinely more expensive to carry than it used to be, which changes the maths on "I'll just let it sit there and pay it down slowly."
What we actually did in Dan's fictional case
Step one: get him on the list, immediately
The first thing that happened wasn't accounting work — it was adding Dan as a client so he appeared in the ATO's system as represented by a tax agent. It signals engagement, and engagement matters enormously in how the ATO treats a late lodger.
Step two: pull the pre-fill data
Dan assumed the shoebox was the whole job. It wasn't. As a registered agent we can access ATO pre-fill data going back multiple years — PAYG payment summaries from his employer, bank interest, dividends and franking credits, private health insurance details, and the annual reporting that ride-sharing and delivery platforms provide to the ATO.
That covered most of his income side without him finding a single piece of paper. What he still had to supply were the things the ATO can't see:
- Rental property income and expenses — agent statements, council rates, water, insurance, interest on the loan, repairs
- A depreciation schedule for the Tarneit property (he didn't have one; getting a quantity surveyor's report was worth far more than it cost)
- Work-related car expenses, logbook or kilometres, for the delivery work
- His share purchase records, for future CGT purposes
Step three: lodge oldest first
We worked through the outstanding years in order. Two of the three years produced refunds — Dan had been over-withheld as an employee and his rental property was running at a loss. That's common. A lot of people avoid lodging out of fear they'll owe money, when in fact the ATO is holding their refund.
The third year had a liability, because he'd sold some shares at a gain and had rideshare income with no tax withheld.
Step four: deal with the debt properly
For the year with a liability, we didn't ignore it. Options on the table included lodging and paying in full, entering an ATO payment plan, or requesting remission of penalties and interest where there were genuine reasons for the delay.
The ATO does consider remission requests, particularly where a taxpayer has voluntarily come forward, has a reasonable explanation, and is now compliant. It's discretionary, not guaranteed — but it's far more likely for someone who lodged three years late of their own accord than for someone who lodged after a final notice.
The GST question nobody expects
One more thing surfaced in Dan's fictional file. Rideshare drivers must register for GST regardless of turnover. The usual $75,000 registration threshold doesn't apply to taxi travel and ride-sourcing — if you're driving passengers for a fare, you need an ABN and GST registration from day one, and you need to lodge BAS.
Food delivery is treated differently — that's ordinary business income, subject to the standard $75,000 threshold. Dan did both, so the distinction mattered. It's the single most common surprise we see with gig economy income in the western suburbs.
What to do if this sounds like you
With the deadline a few weeks away, here's the practical order of operations:
- If you're lodging yourself and you're up to date: get it done before 31 October. myTax pre-fill is usually complete by late July, so the data should be sitting there waiting.
- If you want an agent's extended dates: engage one before 31 October. The date you sign up matters.
- If you have prior years outstanding: don't wait for the ATO to contact you. Voluntary disclosure gives you far better standing on penalty remission than being chased does.
- If you're worried you'll owe money: lodge anyway. Lodging and paying are separate obligations, and FTL penalties apply whether or not you can pay. Payment plans exist. Non-lodgment just makes it worse.
- If you've got gig or side income: check your GST position before you lodge, not after.
The takeaway
The 31 October deadline isn't the end of the world if you miss it — but it is a genuine fork in the road. Get on a tax agent's list before it passes and you generally buy yourself months of breathing room. Let it slide with returns already outstanding and you're accruing penalties per year, per 28 days, on interest that's no longer deductible.
Dan is fictional. The situation isn't. If you're sitting on a shoebox and a bad feeling, the ProPartners team in Werribee works with individuals and small businesses across Altona, Williamstown, Hoppers Crossing, Sunshine, Tarneit and the surrounding suburbs. A conversation in late September is a much cheaper conversation than one in March.
This article is general information only and does not take into account your personal circumstances. Penalty rates, interest rates and lodgment dates change — please confirm current figures with us or the ATO before acting.