Tax Penalty For Late Filing Australia Ato Tax Return 2024

Deadlines are there for a purpose and when they are not fulfilled, you are charged with a penalty.

Sometimes the tax penalty for late filing itself can cost more than the actual amount you were supposed to pay. Therefore, you have to be aware and stay updated.

Australia is a very strict country in terms of taxes and laws. There are quite a lot of rules keeping a check and balance on taxes in Australia. So there’s no way you can escape.

In this article, we are going to discuss the deadlines of taxes in Australia and tax penalties for late filings.

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Tax Penalty for Late Filing

Deadline for Filing your Tax Return

If you are lodging your tax on your own, the deadline for tax lodgment will be October 31.

You have to lodge your tax before this date to save yourself from paying extra dollars. In case 31 october falls on a weekend, you have to pay this tax right on the next business day.

But there is a way that can help you go past the deadline. For instance if you feel like you won’t be able to pay your tax by 31 October, you can hire a registered tax agent to file on your behalf.

Registered tax agents have special filing schedules and they can file the return for their clients later than the deadline.

ATO grants tax agents a special extended date for filing tax returns which means they can lodge the tax return by 15 May, 2024 on the behalf of their clients without any penalties.

Penalties for Late Lodgement

The ATO will apply FTL (Failure to lodge on time penalty) if you fail to lodge or your tax return before deadline. A period of 28 days makes one unit of penalty. The penalty is calculated on the basis of these penalty units. The tax penalty for late filing can go up to a maximum of five penalty units.

The penalty starts off with a striking fine of $275 and increases as further:

For 1-28 Days, the fine will be $275.
For 28-56 Days, the fine will be $550.
For 57-84 Days, the fine will be $825.
For 85-112 Days, the fine will be $1,100.
For 113 Days or more the fine will be $1,375.

The FTL penalty is only applicable for small businesses.

If we talk about businesses classified as medium or large, they have other maths of being penalised.

Such as medium businesses who earn less than $20 million will have their fine factor multiplied by two. Businesses which are classified as large businesses will have their fine factor multiplied by five.

When is the ATO most likely to penalise you?

There are greater chances of ATO penalising you for late filing in the following cases:

If you often lodge your tax returns late, such that you have a poor logement history.

If you have two or more tax returns which are yet to be paid.

If you do not adhere to the rules of the ATO to lodge your tax return.

Default Assessments

When even penalties can’t force you to file your tax return or if you have many outstanding tax returns at hand, ATO can issue you a default assessment letter.

Default assessment is basically an estimate of your tax liabilities and income based on the data that the ATO has.

These are just estimates and hold no reliability. They are mostly higher tax liabilities than you actually owe as they don’t take deductions into account. Therefore you can appeal a default assessment in order to prove what’s right and wrong as you can’t just challenge ATO like that.

And if you file your tax returns late, there are high chances of your taxes being audited or reviewed by the ATO which might also put in more trouble if you were wrong somewhere.

Fair and Reasonable

Penalties are mostly automatically applied by the ATO. But sometimes the ATO can cancel the penalty as well where they feel like it’s fair and reasonable.

For instance if someone was going through some serious illness or hardships or a natural disaster, in that case the ATO thinks it’s fair to let go of the penalty. Otherwise, in all cases you have to pay a tax penalty for late filing. Also Learn About TAX REFORM AUSTRALIA.

FAQs

The maximum tax penalty for filing a late return can go up to a maximum of five penalty units. It means a maximum of $1,375.

The penalty starts off with $275 and increases as further shown:

For 1-28 Days, the fine will be $275.
For 28-56 Days, the fine will be $550.
For 57-84 Days, the fine will be $825.
For 85-112 Days, the fine will be $1,100.
For 113 Days or more the fine will be $1,375.

Late filing penalty is a fine which the ATO charges you when you don’t pay your tax returns on the due date. The above mentioned criteria is for small businesses and for medium or large businesses, the fine factor is multiplied by 2 and 5 respectively.

A person who does not file his income tax return within the due date is supposed to pay $275 for the first 28 days and then this fine keeps on increasing until it reaches its maximum penalty unit and boom! ATO can issue you a default assessment letter.

Conclusion

In this era of inflation and constant changings, try saving as many pennies as you can.

Getting fined and paying dollars for such a small irresponsibility is really not the best way to waste your money. Therefore staying compliant with all the rules and dates of the ATO is important for you.

Even if you feel like that due to some reasons you can’t pay your tax return before the due date, switch to a tax agent immediately before the due date. Make plans for saving to file your tax returns. Keep updated with the tax world!

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