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Beware of increased ATO fines

Overdue ATO lodgement
Overdue ATO lodgement

Gee whiz, the ATO are certainly back to their debt-collecting best! We cannot stress enough that now is not the time to get on the bad side with the tax office, given their increased stance on being tough with penalties for late lodgements and overdue debts. We have even heard that their first resort is to issue director penalty warnings if you fail to lodge or pay on time, so heed our advice to stay on top of your tax obligations!

Okay, so what does this mean for you,? How can you avoid getting in their bad books and more importantly, what can you do if you're behind in lodgements, or have an overdue ATO debt? First step, reach out to us as often we can help liaise with the ATO on your behalf and get you back on track!


Announced as part of the 2023–24 Federal budget, increased funding has been provided to the ATO to scrutinise taxpayers who have high-value outstanding debts of over $100,000 and aged debts older than two years where those taxpayers are:

  • public and multinational groups with an aggregate turnover of over $10 million, or

  • privately owned groups or individuals controlling net wealth of over $5 million.

Increased penalty rates

After a recent increase in January 2023 from $222 to $275, Commonwealth penalty unit rate has witnessed yet another hike from 1 July 2023 and currently sits at $313 per unit. This means that if you fall behind on your tax lodgements you can expect the financial penalties to increase substantially.

Penalties may be levied on late lodgements of returns and reports that include but are not limited to:

  • Activity statements

  • Income tax returns

  • FBT returns

  • PAYG withholding annual reports

  • Single touch payroll reports

  • Annual GST returns and information reports

  • Taxable payment annual reports.

With the increased rates now in effect, a small business can expect to pay base penalties for failure-to-lodge returns ranging anywhere between $313 (1 penalty units) to $1,565 (5 penalty units), one unit for every 28 days the lodgement is overdue.

That's a lot of coin for businesses who already struggling with increased costs.

Small business lodgement penalty amnesty

So is it all doom and gloom for small businesses who are already struggling in the current economic environment? Well the ATO understands that businesses are going through a lot right now and are encouraging small businesses that have overdue income tax returns, fringe benefits tax returns or business activity statements etc. to take advantage of a lodgement amnesty that will run until 31 December 2023.

Announced in the 2023–24 Budget, the amnesty applies to tax obligations that were originally due between 1 December 2019 and 28 February 2022 and has been available since 1 June 2023.

To be eligible for the amnesty, the small business must be an entity with an aggregated turnover of less than $10 million at the time the original lodgement was due.

Small businesses can avail the lodgement penalty amnesty and lodge eligible overdue forms before 31 December 2023 and the ATO will automatically remit any associated failure-to-lodge penalties.

next steps if you get a dreaded penalty

To avoid being penalised at the revised higher rates for failing to lodge returns and reports, ensure you collate and send us all necessary information well before the lodgement due date so we can complete your lodgements on time.

If you're continually late with BAS or IAS, consider lodging with a BAS Agent or Accountant to take advantage of the extra weeks due date that we receive.

If you anticipate delays, best practice is to engage with the ATO and tell them your situation. Then get in contact with us so we can assist you with requesting an extension in lodgement due date, applying for remissions or if necessary, taking out a payment plan to pay off your tax debts.

As ever, The Neill Family Group are here for you, so if you need anything please reach out.

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