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MJE Business Services

Behind on Your Tax Returns? How to Catch Up (Without the Stress)

Last reviewed: 2026-06-16Tax Returns

Behind on Your Tax Returns? How to Catch Up (Without the Stress)

If you have one or several years of tax returns outstanding, take a breath: this is one of the most common situations we see, and it is fixable. People fall behind for all sorts of ordinary reasons - a busy stretch at work, illness, a death in the family, a business that got away from them, or a year that was put off and then snowballed. You are not in trouble for picking up the phone. In almost every case, the sooner you come forward, the better the outcome - and the smaller any penalty.

This guide explains, in plain English, what happens when returns are late, how the costs work, and exactly how we help you get current again without the dread.

You are not alone, and it is fixable

Every year the ATO works with hundreds of thousands of people who are behind. There is no public "naughty list", no knock on the door for being a few years late on a personal return. What the ATO wants is for you to lodge and to engage. Once your returns are in, your situation becomes known, predictable, and manageable - and that is almost always less stressful than the uncertainty of not knowing.

Why catching up matters

Getting current does more than tick a box:

  • It stops penalties and interest from growing. Both are time-based, so acting sooner costs less.
  • It often unlocks money owed to you. Many late lodgers are actually due a refund, not a bill.
  • It clears the way for life admin. Loans, mortgages, visas, Centrelink, government tenders and finance applications frequently need up-to-date returns.
  • It restores peace of mind. The weight of "I really should deal with that" lifts the moment it is in hand.

What it can cost - penalties and interest

There are two separate things the ATO can apply. Knowing how each works takes a lot of the fear out of it.

The failure to lodge on time (FTL) penalty

If a return is lodged late, the ATO may apply a failure to lodge on time penalty. It is not automatic, and for one-off late lodgments the ATO will often warn you first rather than penalise.

The penalty is worked out using penalty units. For individuals and small entities it accrues at one penalty unit for each period of 28 days (or part of a period) that the return is overdue, up to a maximum of 5 penalty units. A penalty unit is currently $330 (for matters on or after 7 November 2024), so the maximum base FTL penalty for an individual is 5 x $330 = $1,650 per late document. (Penalty units are indexed periodically - see the flag in Sources below - so always confirm the current value.)

The key point: the penalty is capped, and it is one the ATO has discretion over. It is not a runaway figure.

The general interest charge (GIC)

Separately, if you owe tax and pay it late, the ATO applies the general interest charge on the unpaid amount. GIC is calculated daily and compounds, and the rate is reviewed each quarter. For the April to June 2026 quarter the annual GIC rate is 10.96%. Note that GIC incurred on or after 1 July 2025 is no longer tax deductible, which is another reason not to let a debt sit.

The good news is that GIC stops growing once a debt is cleared, and it shrinks as you pay a balance down.

The ATO is more helpful than you expect

Two things genuinely work in your favour when you come forward voluntarily.

Penalty remission. The ATO can reduce or remit FTL penalties and interest, especially where your lodgment is out of character with an otherwise good record, or where circumstances outside your control (illness, family crisis, natural disaster) got in the way. Coming forward yourself - rather than being chased - counts in your favour.

Payment plans. If lodging produces a bill you cannot pay all at once, you can spread it over manageable instalments. Individuals and sole traders who owe $200,000 or less can often set up a plan through ATO online services or with our help, paying weekly, fortnightly or monthly. While a plan is in place and you keep to it, the ATO holds off on recovery action.

How a registered tax agent like MJE helps

This is exactly the kind of work we have handled for St George and Sutherland Shire families and businesses since 2000. When you hand it to us, the stress moves off your shoulders and onto ours.

  • We reconstruct your records. Lost receipts and statements? We pull your ATO prefill data (income, interest, dividends, PAYG, private health) and rebuild deductions and business figures with you. Missing paperwork is rarely a roadblock.
  • We lodge multiple years properly, preparing each outstanding year in order and claiming everything you are entitled to - so you do not over-pay out of guilt or under-claim out of haste.
  • We deal with the ATO for you. As your registered tax agent we speak to the ATO on your behalf, request penalty remission where warranted, and negotiate a payment plan that fits your budget. You do not have to make the awkward call.
  • We sort non-lodgment where no return is needed. Some years you may not have needed to lodge at all (for example, income below the threshold). We lodge a non-lodgment advice (return not necessary) so the ATO closes off the year - that alone can clear a chunk of your "overdue" list.

Practical first steps

  1. Gather what you can - rough income details, any group certificates or payment summaries, bank interest, and business records. Do not wait until it is "perfect".
  2. Don't try to guess your way through old returns - errors in catch-up years can compound. A short conversation usually saves money.
  3. Call us in confidence. We will map out which years are outstanding, what is likely owed or refundable, and the cleanest way through - before anything is lodged.

If you would like a hand, our individual tax returns and business tax teams handle catch-up lodgments every week. You can also check tax return due dates to see where you stand.

Frequently asked questions

Will I get in trouble just for calling? No. Coming forward is the thing the ATO encourages, and it generally leads to a better result than waiting to be contacted. There is no penalty for asking for help.

What if I can't pay the tax I owe? That is a separate issue from lodging, and it is very workable. Lodge first, then we arrange a payment plan so you pay it off in affordable instalments. Lodging late but paying over time is far better than not lodging at all.

I'm missing years of paperwork - can you still help? Yes. We use ATO-held data and a structured reconstruction process to rebuild your returns. Most missing records can be worked around.

Let's get you sorted

You have carried this long enough. Let us take it from here - quietly, professionally, and at a pace that suits you. Call MJE Business Services in Mortdale in confidence on (02) 9580 1167 or get in touch and we will help you get back on track.

This is general information, not personal advice. Tax rules and dates change - please check your situation with us or at ato.gov.au.

Sources (ATO)

Have a question about your situation?

We would rather give you a straight answer than have you guess. Book a callback and we will help.

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