Why you might have a failure to lodge on time penalty
You may receive a failure to lodge (FTL) on time penalty if you have an obligation to lodge or report by a particular date, but don't lodge by that due date. This may include failing to lodge your tax return or an activity statement by the due date.
If we apply an FTL penalty, we'll notify you in writing and include:
- the reason for the penalty
- the amount of the penalty
- the due date for payment (at least 14 days after we give you notice).
If you use a registered tax or BAS agent, safe harbour provisions may apply.
Your circumstances
We recognise that sometimes people don't meet their lodgment obligations on time, even with the best intentions. Generally, we don't apply penalties in isolated cases of late lodgment.
We consider your circumstances when deciding what action to take.
If you fail to lodge on time, we'll warn you by phone or in writing before we apply an FTL penalty and issue you a notice to lodge. This will give you the opportunity to lodge or give you the opportunity to engage with us if you're experiencing circumstances preventing you from lodging.
If you're facing challenging personal circumstances and need help managing your tax obligations, visit Tax support when you need it most for other support options available if you are experiencing vulnerability.
How we calculate a FTL penalty
The amount of an FTL penalty is based on:
- the type and size of the entity at the time the document was due to be lodged
- how long it’s been since the due date of the lodgments.
Base penalty amount
The base FTL penalty is calculated at the rate of one penalty unit for every 28 days (or part thereof) that the document is overdue, up to a maximum of 5 penalty units.
The base penalty amount applies to individuals and small withholders. A small withholder is an entity for a particular month that:
- withholds at least one amount during that month
- withholds less than $25,000 or less for the income year.
Medium withholder
The base penalty is multiplied by 2 for an entity that is a 'medium withholder' in the month the document was due to be lodged.
A 'medium withholder' is an entity that:
- withholds more than $25,000 but less than $1 million during an income year
- had assessable income for the income year or GST turnover for the month in which the document was due of between $1 million and $20 million.
Large withholder
A base penalty is multiplied by 5 for an entity that is a 'large withholder' in the month the document was due to be lodged.
A 'large withholder' is an entity that:
- withholds, or was a member of a wholly-owned group that withholds, more than $1 million in the previous income year
- had assessable income for the income year or GST turnover for the month in which the document was due of $20 million or more.
Significant global entities
For a significant global entity, the base penalty amount is multiplied by 500.
Lodgments we apply FTL penalties to
FTL penalties are applied for late-lodged returns, notices, statements or other documents, including:
- activity statements
- tax returns
- FBT returns
- PAYG withholding annual reports
- Single Touch Payroll reports
- annual GST returns and information reports
- taxable payment annual reports
- Combined Global and Domestic Minimum Tax Return (CGDMTR)
- Global Information Return (GIR).
We may apply FTL penalties in situations of escalating non-compliance – for example, where a taxpayer has not lodged after a request to do so.
Generally, we will not issue you with an FTL penalty notice for a late-lodged tax return, FBT return, annual GST return or activity statement if the lodgment results in either a refund or a nil result, unless:
- the FTL penalty was applied before the return or statement was lodged
- the unlodged document is a third-party data report, such as a taxable payments annual report
- you are classified as a large withholder.
Requesting remission
If you receive a penalty notice for failing to lodge a document on time, you can ask for a remission of the penalty. We have the power to remit all or part of the penalty, based on your individual circumstances.
You will be expected to lodge your outstanding documents before you request remission.
For more information, see PS LA 2011/19 Administration of the penalty for failure to lodge on time.
How to request a remission of FTL penalty
To request a remission of FTL penalties, visit How to request a remission of interest and failure to lodge penalties.
Information we need to decide a remission request
You'll need to provide us with sufficient information so we can decide whether to remit the FTL penalty, this may include:
- the specific event or circumstances that impacted your ability to lodge on time
- how this caused the delay in lodgment
- whether the FTL penalty was caused by circumstances beyond your control
- why you or your tax professional were not able to request further time to lodge.
Circumstances where we'd likely accept or decline a remission request
There is no specific list of circumstances where penalty remission would be accepted or declined as each case is reviewed on its merits. The following circumstances are a guide only and reflect common circumstances we see.
Requests we would likely accept
The following are some circumstances where it's likely that some or all of the penalty would be remitted:
- your registered tax or BAS agent was ill with a severe illness that impacted their ability to assist you and it was impractical for you to make alternative arrangements
- you had or were caring for another person who was ill with a severe illness
- you could not lodge as you had not received information from other parties such as employers (for example, a payment summary or income statement) that would enable you to lodge – ideally, you should be able to demonstrate you have made a genuine attempt to get this information
- you were affected by a disaster such as fire or flood or state of emergency which meant you were unable to lodge, or you may have lost some records
- you experienced financial abuse, coercive control, family or domestic violence or were otherwise experiencing vulnerability that impacted your ability to lodge on time.
Requests we would likely decline
While each case is decided on its own merits, the following are some circumstances where it's unlikely that your request for remission would be accepted:
- you could not lodge on time because you were on holiday
- you could not lodge on time because you were busy with work commitments
- you could not lodge because you were ill with a short-term, non-severe illness (such as a cold)
- you did not receive any reminders to lodge from the ATO
- you have not yet lodged the document.
Safe harbour from FTL penalty
If you engaged a registered tax or BAS agent to lodge your return or statement, you won't be liable for FTL penalty if both of the following apply:
- you can show that you provided the agent with all relevant tax information to enable them to lodge the return or statement by the due date
- the agent's failure to lodge the return or statement was not because they were reckless or intentionally disregarded the tax law.
To be eligible for safe harbour you will need to provide evidence that you supplied all of the relevant information to enable the agent to lodge the return or statement by the due date. If we determine that the safe harbour provision doesn't apply, you can still seek a remission of FTL penalty.
To request safe harbour exemption of an amount you can:
- write to us either through Online services for business or Online services for agents (you must be registered)
- contact us by phone or write to us.
Online services for business
Request safe harbour exemption in Online services for business using Secure mail. Select the following topic and subject of your message:
- Topic – Activity statements
- Subject – Cancellation of failure to lodge on time (FTL) penalty (safe harbour)
Online services for agents
Tax professionals can request safe harbour exemption for their clients in Online services for agents using Practice mail. Select the following topic and subject of your message:
- Topic – Debt and lodgment
- Subject – Cancellation of FTL penalty (safe harbour)
By phone or write to us
To request safe harbour exemption for an amount:
- below $10,000, phone us
- of $10,000 or more, write to us outlining the circumstances that led to the delay in lodgment and the reasons why the safe harbour exemption should apply
AUSTRALIAN TAXATION OFFICE
PO BOX 327
ALBURY NSW 2640