Failing to lodge your tax returns or Business Activity Statements (BAS) on time isn’t just a minor oversight—it can result in serious consequences, including significant penalties or even imprisonment in extreme cases.
What Can Happen If You Don’t Lodge?
The ATO takes missed lodgements seriously. Here’s what can happen:
- Penalties: You may face a Failure to Lodge on Time (FTL) penalty, calculated based on your entity size and the period of delay. For small entities, the penalty starts at one penalty unit per 28 days overdue, capped at five penalty units. Medium and large entities face even higher penalties, scaled accordingly.
- Default Assessments: If you fail to lodge, the ATO may issue a default assessment based on their estimates of your income or GST liability, which may not be favourable.
- Prosecution: Repeated non-compliance or deliberate disregard for tax obligations can lead to court action, fines, and in extreme cases, imprisonment.
An Example of Non-Compliance
Recently, a South Australian business owner, identified as R.C., faced imprisonment after failing to lodge 18 BAS and 4 tax returns over several years. Despite repeated court orders and leniency, R.C. consistently disregarded his obligations, leading to fines, breaches of good behaviour bonds, and ultimately a custodial sentence.
Avoiding Penalties: What Should You Do?
- Lodge on Time: Always aim to lodge your tax returns and BAS by the due date.
- Seek Extensions: If you’re struggling, contact the ATO to request an extension before the deadline.
- Work with Professionals: Engaging a registered tax agent or qualified accountant can help ensure your obligations are met on time and accurately.
What If You’re Already Late?
If you’ve missed a deadline, don’t panic—but act quickly. The ATO considers individual circumstances and may not impose penalties for isolated cases of late lodgement. However, repeated or deliberate delays are treated more harshly.
At Nexus Accounting, we specialise in helping individuals and businesses catch up on overdue obligations. Whether you’re facing late BAS lodgements or tax returns or need assistance with penalty remission requests, we’re here to support you.
Nexus Accounting provides tax return service for Adelaide-based businesses & individual clients.
Don’t Risk It—Stay Compliant
The consequences of ignoring tax obligations are severe but can be avoided with the right guidance. If you need help navigating your obligations, contact us today. Together, we’ll keep your business compliant and penalty-free.
Disclaimer:
The content provided in this newsletter is for informational purposes only and does not constitute taxation or legal advice. While every effort is made to ensure the accuracy of the information, it is general in nature and may not be suitable for your individual circumstances.
For personalised tax advice tailored to your specific situation, please get in touch with us to arrange an appointment.