Failing to Lodge Tax Return on Time

Tax Return Online

Failure to lodge (FTL) on time penalty may be applied if the taxpayer is required to lodge a return or statement with ATO by a certain day, but doesn’t.

Generally, ATO doesn’t apply penalties in isolated cases of late lodgment.

ATO warns you by phone or in writing if you’ve failed to lodge. If ATO applies FTL penalty, they send you a penalty notice stating the amount and payment date of the penalty.

FTL penalty Calculation

For small entities, 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 late on lodgment , up to a maximum of five penalty units.

There is automated penalty system that applies FTL penalty to late-lodged returns and statements, including:

– activity statements
tax returns
– FBT returns
– PAYG withholding annual reports
– annual GST returns and information reports
– taxable payment annual reports.

ATO may apply FTL penalty manually in some situations such as a taxpayer has not lodged after a request to do so.

A penalty is not applied to a late-lodged tax return, FBT return, annual GST return or activity statement if the lodgment results in either a refund or a nil result, unless:

– FTL penalty was actually applied before the statement or return was lodged
– the un-lodged item was a third-party data report.

Starting from 1 July 2017, the penalty unit amount is $210.

Lodging tax return online on time is a quick and easy way to avoid FTL penalty.