Do you have a previous year’s tax return that’s overdue? Perhaps you have several you are avoiding? Don’t worry, it is never too late to lodge!
If you earn more than the tax-free threshold you’re required to lodge a tax return (under circumstances) you are also required to lodge if you make less).
There are certain obligations that all taxpayers must meet. These include lodging and paying taxation obligations on time. On time failure to lodge and/or pay can result in significant penalties.
How the ATO calculates and applies a Failure to lodge (FTL) penalty
The ATO is automated when it comes to FTL and applies FTL penalty to late-lodged returns and statements such as:
- Activity statements
- Tax returns
- FBT returns
- PAYG withholding annual reports
- Annual GST returns and information reports
- Taxable payment annual reports.
It is calculated based on the size of the entity or individual.
The ATO suggests “for a small entity, FTL penalty is calculated at the rate of one penalty unit for each period of 28 days (or part thereof) that the return or statement is overdue, up to a maximum of five penalty units” generally though, a penalty will not be applied if you have a nil return or a refund.
Receive a remission notice from the ATO?
Whilst the maximum penalty which can be applied on prosecution is $8,500 (or imprisonment for up to 12 months) it’s not common and usually reflects a history of penalties. If you have failed to lodge a return, especially where you have several years outstanding, the ATO can issue you with one or more default assessments.
If the delay was caused by extenuating circumstances, contact us to chat about your options.
Remember the longer you wait, the more chance there is that the ATO will fine you, so be sure to get in touch ASAP to finalise your return/s today.
Ready to book a time, click here to use our real time online booking service and tick your tax off your to do list!
Connect with us by phone on 07 3814 6512 or fill out our contact form and we can contact you.
*Please note: The information above is general in nature. JSM Accounting Group cannot guarantee that the ATO won’t charge late fees because this will depend on your individual tax history and circumstances , however we can negotiate with the ATO for you to achieve the best possible outcome. Final assessment of your return and refund amount lies solely with the Australian Taxation Office.
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