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  • Penalties

    We may impose a penalty if you fail to comply with your tax obligations, such as where you do not lodge a document by the due date.

    Generally we will not impose a penalty unless we have notified you first, though some penalties, including director penalties, are automatically imposed by law.

    Further Information

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    Penalties and interest

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    Remission of penalties

    You can ask us to remit some or all of any penalty we impose. We will look at your individual circumstances, particularly the factors relating to the penalty.

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    Request remission of interest charges or penalties.

    End of further information

    Example

    Jonathon is an electrical subcontractor. He operates his business using a company structure. The company lodges quarterly business activity statements (BAS) for its GST and pay as you go (PAYG) instalments.

    He has regular lease payments for his work vehicle and a number of other regular expenses. Unfortunately there have been significant delays in payments to him for the work he has carried out even though he has had to pay suppliers up-front for materials. This has caused significant cash flow problems.

    In response to these cash flow problems, he didn't put aside enough for his GST or PAYG instalments. He also fell behind with his BAS lodgments. We imposed failure to lodge on time (FTL) penalties for the overdue BAS lodgments, and general interest charge (GIC) for the late payments.

    Eventually, Jonathon decided he needed to deal with his problems. He employed a bookkeeper who brought the business records up-to-date and lodged the outstanding BAS. On Jonathon's behalf, the bookkeeper contacted us and negotiated a payment arrangement for the outstanding debt (including penalties and interest).

    All payments were made as agreed. We were able to remit some of the FTL penalties and GIC, which made it easier for Jonathon's company to get back on track.

    • Last modified: 26 Aug 2013QC 32246