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$1,110 fines coming for Aussies who make tax error

Lucy Dean
·2-min read
An array of the new australian currency as of 2019
Here's how to plead against the fine. Image: Getty

Australians who missed the tax return deadline have been warned to lodge as soon as possible or face fines of up to $1,110.

The 2020 tax deadline came and went on 2 November for all taxpayers who aren’t lodging through an agent, and now the Australian Tax Office will begin chasing down late lodgers, H&R Block tax communications director Mark Chapman told Yahoo Finance.

“They’re now in a position whereby they’re already up for a $222 late fine,” Chapman said.

Late lodgers will receive a $222 penalty from 2 November, with the fine increasing by $222 every 28 days after that until it reaches a maximum penalty of $1,110. In some rare instances, lodging too late can even land you in jail.

Chapman said late lodgers will receive a notice about the penalty when they go to file, but the key to avoiding too much financial pain is simple: lodge early.

“The earlier you lodge, the lower that penalty will be and the more confidence there is that the ATO might actually lower the penalty if you've got a [good] compliance history,” he said.

“It's definitely not something you should delay because the penalty does keep racking up every 28 days. So take the effort in the first few weeks of November to get your tax return lodged.”

Who will the ATO target for fines?

Chapman said Australians who expect to receive a refund shouldn’t be too concerned about receiving a penalty.

“[Generally] the ATO won’t penalise people who are due to get a refund because effectively you're penalising yourself by not lodging and not getting your refund,” he said.

The story is different for taxpayers who will have a tax bill.

How do I dispute a fine?

The ATO is unlikely to impose a fine if the late lodgment is an isolated incident, it said in a statement.

Chapman said the best way to have a penalty remitted is simply to lodge as quickly as possible. Otherwise, taxpayers may need a good reason as to why they couldn’t lodge.

That could be a medical reason, a natural disaster or a death in the family.

And if there’s a reason a taxpayer can’t file, it’s worth getting a tax agent on board.

“Otherwise you're relying on the goodwill of the ATO which is not necessarily something you want to rely on.”

Want to make next year your best yet? Join us for an Hour of Power at 10am AEDT Tuesday 24 November to discover 21 ways to make your money work for you in 2021. Registrations are now open.