Failing to lodge tax returns on time penalty may be applied if a person is required to lodge a tax return or statement with ATO by a known date, but doesn’t lodge.
ATO doesn’t generally apply penalties in isolated cases of late lodgments.
ATO warns you if not lodged by phone or in writing. ATO sends you a penalty notice If FTL penalty is applied stating the payment date and amount of the penalty.
FTL penalty is calculated for small entities at the rate of one penalty unit for each period of 28 days (or part thereof) that the returns or statements are late, up to 5 penalty units.
An automated system applies FTL penalty to late-lodged returns and statements including:
– FBT returns
– tax returns
– activity statements
– PAYG withholding annual reports
– taxable payment annual reports
– annual GST returns and information reports.
In some cases, ATO may apply FTL penalty manually such as a person 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 lodgments result in a refund or a nil result, unless:
– FTL penalty was applied before the statement or return was lodged
– the un-lodged items were third-party data reports.
From 01/07/2017, the penalty unit amount is 210AUD.
Lodging online tax return on time is a fast way to avoid FTL penalty.