• Failure to lodge on time penalty

    Failure to lodge (FTL) on time penalty may be applied if you're required to lodge a return or statement with us by a particular day, but don't.

    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'll warn you by phone or in writing if you've failed to lodge. If we apply FTL penalty we'll send you a penalty notice stating the amount and due date of the penalty.

    On this page:

    Calculating FTL penalty

    For a small entity, FTL penalty is calculated at the rate of one penalty unit for each period of 28 days (or part thereof) that the return or statement is overdue, up to a maximum of five penalty units.

    • For a medium entity the penalty is multiplied by two. A 'medium entity' is a medium withholder for PAYG withholding purposes, or has assessable income or current GST turnover of more than $1 million and less than $20 million.
    • For a large entity the penalty is multiplied by five. A 'large entity' is a large withholder for PAYG withholding purposes, or has assessable income or current GST turnover of $20 million or more.

    How we apply FTL penalty

    An automated penalty system applies FTL penalty to late-lodged returns and statements, including:

    • activity statements
    • income tax returns
    • FBT returns
    • PAYG withholding annual reports
    • annual GST returns and information reports
    • taxable payment annual reports.

    We may apply FTL penalty manually. This is usually in situations of escalating non-compliance – for example, where a taxpayer has not lodged after a request to do so.

    As a rule, a penalty will not be applied to a late-lodged income tax return, FBT return, annual GST return or activity statement if the lodgment results in either a refund or a nil result, unless:

    • FTL penalty was applied before the return or statement was lodged (ie the penalty will not be remitted even if the subsequent lodgment results in a refund or nil result)
    • the unlodged item is a third-party data report, such as a taxable payments annual report.

    Requesting remission

    If you receive a penalty notice for failing to lodge a return or statement on time, you can ask for it to be remitted in full or in part if there are extenuating circumstances – for example, if the failure to lodge was the result of natural disaster or serious illness.

    To request remission:

    • of an amount below $10,000, phone us
    • of an amount of $10,000 or more, write to us outlining the circumstances that led to the delay in lodgment and the reasons why the penalty should be remitted:

      Australian Taxation Office
      PO Box 327
      ALBURY  NSW  2640

    Tax agents and BAS agents

    Agents can use the portals to request remission on behalf of their clients:

    • Tax Agent Portal: select 'Mail – New message' and the topic 'Refunds and remissions'
    • BAS Agent Portal: select 'Mail – New message' and the topic 'Remission of Failure to Lodge on time penalty'.

    For amounts below $10,000 agents can also phone 13 72 86 (fast key code 1 2 2).

    See also:

    Safe harbour

    If you engaged a registered tax agent or BAS agent to lodge your return or statement, you will not 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 law.

    If we determine that the safe harbour provision does not apply, you can still seek a remission of FTL penalty.

    Last modified: 10 Feb 2016QC 33410