Australians who don’t lodge a tax return in time can face a penalty of up to $1,110, depending on how many days the return is overdue, the Australian Taxation Office (ATO) has revealed.
If you earned above $18,201 for the financial year and failed to lodge your tax return, you’ll be charged a penalty unit for each period of 28 days that the document is overdue, for a maximum of five penalty units.
As of 1 July this year, each penalty unit is $222, meaning the maximum penalty is $1,110 for not lodging your return.
The deadline for your 2019-20 tax return is 31 October 2020.
“We recognise that sometimes people don't meet their lodgment obligations on time, even with the best intentions,” the ATO stated.
“Generally we don't apply penalties in isolated cases of late lodgment. We'll warn you by phone or in writing if you've failed to lodge. If we apply FTL (Failure To Lodge) penalty we'll send you a penalty notice stating the amount and due date of the penalty.”
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The penalty will usually be applied automatically in situations of non-compliance, for example if the ATO requested you lodge and you failed to do so.
In serious cases, the ATO can prosecute those who have failed to lodge their tax returns, with the maximum penalty being a fine of $8,500 or imprisonment for up to 12 months.
In fact, in 2018 a 65-year-old woman from Geraldton was given a 12-month suspended jail sentence for failing to lodge 91 tax returns and business activity statements.
Judith Ahearn’s sentence followed “years of warnings and notices”, the ATO said, as well as two previous court-imposed fines of $30,000 and $20,000.
“Despite our repeated attempts to engage with Mrs Ahearn to resolve her outstanding tax returns, she has shown a complete disregard for her basic obligations as a member of the Australian community,” ATO assistant commissioner Peter Vujanic said.
“While we’re disappointed that we have not been able to resolve this matter outside of the court system, we hope that the sentence handed down today sends a message to the community that lodging your tax returns is not optional.”
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