Failure To Lodge

What needs to be lodged

The ATO expects Australian taxpayers to bear the burden of complying with up to 77 separate tax obligations each year. It is hardly surprising then, that many businesses fall behind and fail to comply.

According to the Australian Bureau of Statistics there are approximately 2.1 million active businesses in Australia. The Commissioner of Taxation, in his recent Annual Report, cites an average compliance for income tax returns of 75.6% for companies and 83% for individuals. This equates to hundreds of thousands of taxpayers who either lodge late or fail to lodge anything at all.

Will I be criminally prosecuted if I fail to lodge

A failure to comply with your statutory obligations is a serious offence that regularly leads to criminal prosecution. The longer you leave it the worse it becomes. Don’t be the next person that the ATO prosecutes – we can help you avoid prosecution, reduce the amount payable and restructure your affairs to give you in the best tax profile position possible.

What are the Court imposed penalties for failure to lodge

The penalties for failure to lodge are swift and severe. Offences pursuant to section 8C of the TAA 1953 are punishable (as at 1 July 2020) by fines of up to $4,440 for the first offence, $8,880 for the next offence and $11,100 for each subsequent offence, with a potential 12 month custodial sentence (prison). Considering that it is common to have multiple years of non-lodgement and BAS is due 4 times per year it is easy to see how the potential fines can escalate very quickly. Of course, this is in addition to any tax and interest that is owed.

Am I personally liable for offences committed by a company or trust

You may be asked to appear before the Court in your individual capacity even if the tax offence was committed by a company or trust, leaving you with a criminal record. The deeming provisions in section 8Y of the Tax Administration Act 1953 (TAA) allow the ATO to attack the company officer responsible for the tax offence of the company or trust and bring them before the Court to be punished.