The following fictional scenarios are intended to demonstrate the circumstances where lodgment deferrals may be granted or refused.
You can't predict the unpredictable
Jane is a sole operator who provides tax agent services to the clients in her community in Bundaberg. After a night of heavy rain Jane arrived at her practice on 13 October 2013 and found her roof had leaked and flooded her practice. Jane has been advised that it will take about two weeks to fix the damage to her practice and she will be unable to access her premises for this period.
On 28 October, Jane returns to her practice and while she can now work on her clients' returns she finds that some of the paperwork has been damaged and she has a backlog of other work as well. Jane realises she cannot meet the due date for 13 individual clients who had already provided the relevant paperwork for their 2012-13 income tax return due on 31 October 2013. Jane contacts her clients to request replacement copies of the damaged paperwork and asks them to forward it to her immediately. Jane wants to request a lodgment deferral of five weeks to lodge these clients' tax returns which she believes will allow her enough time to receive the replacement paperwork and complete the returns while attending to other clients' tax matters.
Jane looks at the lodgment deferral practice statement (PS LA 2011/15 Lodgment obligations, due dates and deferrals) and believes she has experienced exceptional and unforseen circumstances. As she is requesting lodgment deferrals of five weeks, she submits the Request for additional time to lodge form via the Tax Agent Portal. In her request she fully explains the circumstances that led to her inability to lodge her clients' tax returns by the due date and the steps she has taken to help facilitate lodgment.
Jane's request for lodgment deferrals was approved because:
- exceptional circumstances existed that affected Jane's ability to lodge by the due date and Jane fully explained these circumstances in her request
- the request was submitted before the due date (that is before 31 October 2013)
- the correct form was used (the Request for additional time to lodge form) and submitted via the Tax Agent Portal.
Don't rely on lucky stars
John is an owner of a tax practice that specialises in servicing clients who have fairly large turnovers. John has five accountants working for him. In October 2013, John asked his staff to notify him of their proposed Christmas leave. John is planning to take a three week holiday over Christmas and will be returning to work on 9 January 2014. In the first two weeks of January 2014, all staff but one accountant have applied for time off. John knows income tax returns for taxable large/medium business taxpayers are due on 15 January 2014. He also knows that if he approves all the leave it will be difficult for him to meet this due date; however, his staff have worked hard during the year so he approves all of their leave.
John knows it will be difficult to meet the lodgment due date of 15 January given the number of staff he has on leave so before starting leave in December he decides to apply for lodgment deferrals. He is not sure yet which clients he will be able to lodge by 15 January so decides he will just apply for all of them. John knows that clients with a due date of 15 January are excluded from self-assessed deferrals so he submits the Request for additional time to lodge form via the Tax Agent Portal requesting lodgment deferrals until the end of January 2014.
John's request for lodgment deferrals was refused because:
- although John submitted the request before the due date, lodgment deferrals should only be applied for where they are genuinely needed not for all clients with a particular due date
- no exceptional or unforseen circumstances existed - for example, John knew about the staff absences and should have ensured that enough staff were available to assist with completing the returns.
Don't get caught short
Bob, a registered tax agent, runs a tax practice employing three accountants and one administration staff member. At the beginning of April 2013, Bob decides he wants to update some computer software so he arranges deployment for the end of April. He knows this is a busy period for him in the lead-up to the peak lodgment due date of 15 May 2013 but decides the new computer software will be better for his staff so takes a risk with the deployment date. During deployment there are some technical issues which result in the network being down for a week while a technician works on the issues. Bob knows that income tax returns for individuals and trusts with a lodgment end date of 15 May 2013, receive a concessional lodgment date of 5 June provided payment is also made by this date. He believes they will be ok to meet this concessional lodgment date even with the loss of a week's productivity due to the computer issues.
However, at the beginning of June 2013, Bob realises that he underestimated the impact of the new software. His staff have reported that they are not familiar with the new software so it has taken them more time than normal to prepare returns and to make matters worse the system has been running slow and crashing regularly which has resulted in them losing work. On 4 June 2013, Bob submits a Self-assessed lodgment deferrals form via the Tax Agent Portal requesting a deferred due date for two weeks from this date.
Bob's request for lodgment deferrals was refused for the following reasons:
- The request was not made on or before the due date and; therefore, did not meet the self-assessed lodgment deferral guidelines - 5 June is not a lodgment end date but a concessional arrangement given under the lodgment program if both lodgment and payment are received by this date. Bob would have needed to have submitted the request before 15 May 2013.
- Bob's request for an additional two weeks also means the timeframe requested was outside of the self-assessed deferral guidelines. When calculated from the original due date of 15 May 2013, Bob was requesting a total of five weeks additional time (four weeks is the limit for annual obligations under the self-assessed deferral guidelines).
In this example, Bob would have needed to submit a Request for additional time to lodge form and included an explanation of why he was unable to submit the request on or before the due date of 15 May. The request would have been considered on its merits with regards to the particular circumstances that led to the inability to lodge by the due date. If Bob did submit a Request for additional time to lodge form it would be questionable if the circumstances would warrant additional time given Bob knew it was a busy period for his practice but chose to deploy the new computer software during this period.
It's enough to make you pull your hair out
Paul started his own tax agent practice five years ago and employs one full-time and one part-time accountant. In the middle of March 2013, he decides to purchase another tax practice from a registered tax agent that is retiring. Overnight his client base increases from 130 clients to 250 clients. Paul knows his part-time accountant is due to have her second child in May 2013 and will be taking maternity leave from the middle of April 2013. Instead of replacing her with another part-time accountant, given the increased workload, he decides to employ two full-time accountants at the end of March 2013. He knows he will need to provide training for these two new accountants; however, with his longstanding accountant and Paul himself mentoring the new staff he feels that within a few weeks they will be performing at an acceptable level.
His part-time accountant commences her maternity leave in the middle of April; however, with three full-time accountants Paul is confident that they will be able to meet the lodgment due date of 15 May for most clients and at the very latest he will ensure lodgment and payment is made for eligible clients by the concessional date of 5 June. In the middle of April, his longstanding accountant has a car accident and has advised Paul that they will be unable to return to work for six weeks. A week later he receives a call from one of his new accountants advising they are sick with the flu and won't be in for a week. The illness extends in to a second week and with only one other new accountant and Paul working on the returns he knows he is well behind in meeting the lodgment due date of 15 May. Paul has been making progressive lodgments where possible; however, on 14 May he realises he still has to lodge income tax returns for 65 clients.
As his longstanding accountant is not expected to return until the end of May, and although the new accountant who was ill has returned to work, he knows both the new accountants did not receive the level of training they need and it is taking much longer to complete each tax return. He believes it will take another five weeks from 15 May to finalise the remaining tax returns. Paul believes he has exceptional and unforseen circumstances so submits a Request for additional time to lodge form via the Tax Agent Portal. He fully explains the circumstances that have led to his inability to lodge by the due date and outlines the prolonged, expected and unexpected staff absences, including the maternity leave, the car accident and illness for two weeks. He also outlines how this has impacted on the training plan for his new staff and his attempts to meet the lodgment date through progressive lodgments. Paul also decides to indicate on the form that he is requesting additional time to pay as he considers his clients should not be disadvantaged by them not being able to lodge by the due date. However, Paul does not provide an explanation in the form of why a payment deferral is also required.
Paul's request for lodgment deferrals was approved because:
- exceptional and unforseen circumstances existed that affected Paul's ability to lodge by the due date and Paul fully explained these circumstances in his request
- the request was made before the due date of 15 May
- the correct form was used (the Request for additional time to lodge form) and submitted via the Tax Agent Portal.
Paul's request for additional time to pay is refused because:
You can't plan for everything
Cindy, a registered BAS agent, runs her own mobile business providing BAS services to her clients in Adelaide. During July 2013, Cindy has been working on her client's Quarter 4 activity statements which are due on 28 July 2013. By 28 July she has lodged 28 activity statements but is still working to finalise another 11 activity statements for her clients. Cindy is not concerned as she normally lodges the activity statements via the BAS Agent Portal so can take advantage of the electronic lodgment concession, which allows an extra four weeks until 25 August 2013.
On 17 August, Cindy receives bad news advising her that her father has passed away. Cindy has to rush off interstate to be with her family, help organise the funeral and deal with her father's affairs. Cindy returns to Adelaide on 31 August and realises she still has five of the 11 activity statements to lodge but she has now missed the electronic lodgment concession date of 25 August. Cindy believes that she has exceptional circumstances so submits a Request for additional time to lodge form via the BAS Agent Portal. As she knows her request has not been submitted by the due date of 28 July, she explains the factors that prevented the request from being made before the due date. She also includes the steps she took towards progressive lodgments to meet the original due date of 28 July and the electronic lodgment concession date of 25 August.
Cindy's request for lodgment deferrals was approved because:
- although the request was not received by the due date, Cindy provided a full explanation of why the request was not made before the due date
- exceptional circumstances existed that affected Cindy's ability to lodge the five remaining activity statements and she fully explained these circumstances in her request
- the correct form was used (the Request for additional time to lodge form).
Sometimes it's out of your hands
Matt, a registered BAS agent, receives a call from a client's secretary in the middle of August 2013 advising that the sole director of their company had been admitted to hospital for emergency surgery. The secretary advises they expect the director to be in hospital for a couple of weeks. The company is relatively small with the sole director being the only person responsible for compiling the activity statement information and remitting payments to the ATO. Matt was expecting to receive information from the company director that week to facilitate lodgment of the company's monthly July activity statement by 21 August 2013. Matt knows that with this turn of events, lodgment by 21 August will not be possible and the accompanying payment will not be able to be made by the due date.
Matt feels that there are exceptional and unforseen circumstances that exist for his client. He submits a Request for additional time to lodge form via the BAS Agent Portal requesting an additional two weeks to lodge from 21 August 2013. Matt also indicates on the form that he is requesting a payment deferral of two weeks given there is no one else in the company with access to make the accompanying payment. He clearly outlines why the exceptional or unforseen circumstances will affect payment being made by the due date.
His request for lodgment and payment deferrals was approved because:
- exceptional and unforseen circumstances existed that affected the client's ability to provide the required information to Matt for lodgment by the due date
- a payment deferral was also granted as Matt fully explained his client's impediment to making a payment by the due date
- the request was made before the due date of 21 August 2013
- the correct form was used (the Request for additional time to lodge form) and submitted via the BAS Agent Portal.
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These fictional examples are provided only as a guide. For all deferral requests other than a self-assessed deferral, it is important that you fully explain your particular circumstances as each request will be considered based on this information along with the length of additional time sought.
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More information
For more information to help you prepare your requests for additional time to lodge, refer to:
For more information about the lodgment program and to access the tax agent lodgment deferral forms, refer to Lodgment program 2012-13 - lodgment deferrals for registered agents.
Last Modified: Tuesday, 30 April 2013