The ATO (Australian Taxation Office) introduces new, much higher, Failure to Lodge (FTL) penalty amounts
Source - See: http://www.ato.gov.au/individuals/PrintFriendly.aspx?ms=individuals&doc=/content/23605.htm&page=3
The government has revised FTL penalties from the basic penalty of $110 up to $170. That's right. A $60 increase on the $110 basic penalty unit or a 66% increase. There are two more levels which have gone from $220 to $340 for a Medium sized entity and from $550 to $850 for a large Entity.
An FTL is NOT tax deductible. Interest is charged on the penalty once it is raised by the ATO until it is paid. The Interest (General Interest Charge, GIC) is deductible.
In general terms this is how it works. If you are late lodging an [ATO] 'approved form' which is required to be lodged with the ATO by a due date and it is not received by that due date then the ATO can levy an FTL penalty. Approved forms include: a [Business or Instalment] Activity statement (BAS, IAS), an income tax return, a fringe benefits tax return, a pay as you go (PAYG) withholding annual report (PAYGPSS), an annual goods and services tax (GST) return or an annual GST Information report. Whilst the FTL system is not a 'fully' automatic system an FTL will nearly always follow a "warning" from the ATO that they will levy an FTL 'next time' a form is late. There are some exceptions and conditions - like refunds that might stop an FTL, but in general all the charges can be avoided if forms are lodged on time or the ATO is contacted ahead of the due date.
An FTL can be reversed or remitted but, generally speaking, the ATO needs to be convinced that the late lodgement was either out of your control, a 'once off' delay or there were extenuating circumstances. We can assist you to approach the ATO to seek remission.
How is an FTL calculated? The FTL is based on days overdue: if you are a 'small' entity (person or small business) it works like this:
28 days or less - $170
29 to 56 days - $340
57 to 84 days - $510
85 to 112 days - $680
113 days or more - $850
If you are unable to lodge a document by the due date, you should contact us so we can approach ATO to see if an alternative date can be agreed to with the ATO. The ATO is not easily persuaded but if you meet their criteria (or we argue you do) then a submission can be made and negotiations entered into. It is a good idea to do this AHEAD of the due date as the ATO will not be very flexible if the due date has come and gone. Again, if there are extenuating circumstances then they will listen, but not necessarily change the due date.
In some circumstances the ATO will recognise a community need and the ATO has already moved to change the due dates for all taxpayers affected by bushfires or floods in certain postcodes, so the ATO is not completely inflexible.
In any event if you have any concerns about lodgement due dates or have received an FTL please contact us.
Brett Lamond
30 January 2013
[20130130]
Last Edit: 30 January 2013
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The government has revised FTL penalties from the basic penalty of $110 up to $170. That's right. A $60 increase on the $110 basic penalty unit or a 66% increase. There are two more levels which have gone from $220 to $340 for a Medium sized entity and from $550 to $850 for a large Entity.
An FTL is NOT tax deductible. Interest is charged on the penalty once it is raised by the ATO until it is paid. The Interest (General Interest Charge, GIC) is deductible.
In general terms this is how it works. If you are late lodging an [ATO] 'approved form' which is required to be lodged with the ATO by a due date and it is not received by that due date then the ATO can levy an FTL penalty. Approved forms include: a [Business or Instalment] Activity statement (BAS, IAS), an income tax return, a fringe benefits tax return, a pay as you go (PAYG) withholding annual report (PAYGPSS), an annual goods and services tax (GST) return or an annual GST Information report. Whilst the FTL system is not a 'fully' automatic system an FTL will nearly always follow a "warning" from the ATO that they will levy an FTL 'next time' a form is late. There are some exceptions and conditions - like refunds that might stop an FTL, but in general all the charges can be avoided if forms are lodged on time or the ATO is contacted ahead of the due date.
An FTL can be reversed or remitted but, generally speaking, the ATO needs to be convinced that the late lodgement was either out of your control, a 'once off' delay or there were extenuating circumstances. We can assist you to approach the ATO to seek remission.
How is an FTL calculated? The FTL is based on days overdue: if you are a 'small' entity (person or small business) it works like this:
28 days or less - $170
29 to 56 days - $340
57 to 84 days - $510
85 to 112 days - $680
113 days or more - $850
If you are unable to lodge a document by the due date, you should contact us so we can approach ATO to see if an alternative date can be agreed to with the ATO. The ATO is not easily persuaded but if you meet their criteria (or we argue you do) then a submission can be made and negotiations entered into. It is a good idea to do this AHEAD of the due date as the ATO will not be very flexible if the due date has come and gone. Again, if there are extenuating circumstances then they will listen, but not necessarily change the due date.
In some circumstances the ATO will recognise a community need and the ATO has already moved to change the due dates for all taxpayers affected by bushfires or floods in certain postcodes, so the ATO is not completely inflexible.
In any event if you have any concerns about lodgement due dates or have received an FTL please contact us.
Brett Lamond
30 January 2013
[20130130]
Last Edit: 30 January 2013
Back to Articles
