What Are The Consequences Of Not Lodging Tax Return On Time?

December 17, 2021    taxreturnperth

In Australia, any individual earning more than $18200 in a year must lodge an income tax return at the end of the financial year. In some cases, you may have to lodge it even if your income is less than the threshold figure. Not lodging the tax return for an extended period may force the Australian Taxation Office to impose several penalties and sanctions on you. 

That is why it is always necessary to be aware of what will be waiting for you in the case of not lodging the tax return. Read this blog to understand the possible penalties and consequences.

What Will Happen if You Do not Lodge The Tax?

If your gross yearly income is under $18200 and you haven’t paid any tax. You may not need to lodge a tax return. In that case, however, you must not forget to submit non-lodgement advice to the Australian Taxation office. This document will confirm that you will not need to lodge any tax return. Thus, the ATO cannot assume that you have an outstanding return. But, if you do not submit this non-lodgement advice. The ATO may take necessary action against you for not lodging any tax return.

Read More:- Tax Tips For Your Tax Return as A Sole Trader in Australia 

How Much Fine Must You Pay in The Case of Not Lodging a Tax?

In the case of a failure to lodge your tax by the deadline, the ATO will first issue an FTL (Failure To Lodge) document. The fine amount is calculated at the rate of one penalty unit every 28 days. The maximum number of penalty units that is considered here is five. Right now, the value of one penalty unit is $222, and thus the maximum amount you may have to pay is $1110.

Usually, the penalty is applied automatically. But, if a tax generates a refund, the penalty will not be applicable. Also, if any serious illness or natural disaster occurs, the ATO may decide to remit the amount. For guidance, you can consult an experienced tax return accountant before lodging your return after the deadline. 

What Penalties May You Face When You Lodge a Late Tax Return?

If you have not lodged the tax return for multiple years and penalties have not been able to make you lodge your return, you may be issued with one of several default assessments. A default assessment is made based on your income data held by the Australian Taxation Office. 

One thing to note here is that these estimates may show that you are liable for higher tax than what you actually owe. The reason is that while calculating these estimates, the authority does not consider deductions. You can appeal a default assessment, but you must show the exact amount you owe for that.

Will the ATO Prosecute You For Not Lodging a Tax Return?

Although prosecution is not common, the Australian Taxation Office may take this step if necessary. The maximum penalty you may face in a prosecution case is a fine of $9000 or 12-month imprisonment.

What Should You Do if You Haven’t Lodged Your Tax?

If one or more tax returns are outstanding, you will receive notifications from the ATO. So, it is always important to submit these returns by the deadline every time. We always suggest hiring a professional tax accountant in Perth for a smooth procedure. In addition to helping in lodging a tax , an accountant can also offer you the following benefits.

  • The accountant can guide you about the next steps whenever you fail to meet the deadline. 
  • Your accountant will take care of the issue on your behalf, If there is any possibility of penalty remit
  • If any income information is missing in the tax, the tax accountant can obtain the information from third parties like employers and banks and send it to the ATO. If you have failed to keep any records of deductions, they will discuss with you to figure out what can be claimed.

Read More:- What Responsibilities Towards ATO As Small Business Owner?

How Can Tax Return Perth Help You to Meet the Lodgement Deadline?

Getting your tax returns at a regular interval will also help you enjoy other entitlements like family tax benefits and superannuation co-contribution. Tax Return Perth is a top-ranked taxation firm known for its wide range of income tax return services. You will indeed have to pay a specified fee. But, if your tax results in a refund, that fee will be deducted from the refund amount.

It may happen that you do not have to lodge a return but still receive notice from the ATO only because you haven’t submitted non-lodgement advice. In that case, Tax Return Perth can submit it on your behalf. Also, if you want to reduce the risk associated with a late tax, you may get in touch with the officials of Tax Return Perth. Last but not least, for an on-time lodging of tax returns, too, you may approach them. 

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