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  • Failure to lodge on time penalty

    You may receive a Failure to lodge (FTL) on time penalty if you have an obligation to lodge a return, report or statement with us by a particular day, but don't lodge it by the due date.

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    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, we'll warn you by phone or in writing.

    If we apply 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 notice).

    How we calculate a FTL penalty

    How we calculate a FTL penalty will depend on the size of the entity and the period of time since the due date for lodgment.

    Small entities

    For a small entity, we calculate the FTL penalty 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 5 penalty units.

    Medium entities

    For a medium entity the penalty unit is multiplied by 2.

    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.

    Large entities

    For a large entity the penalty unit is multiplied by 5.

    A 'large entity' is a large withholder for PAYG withholding purposes or has assessable income or current GST turnover of $20 million or more.

    Significant entities

    For a significant global entity, the base penalty amount is multiplied by 500.

    FTL penalties for significant global entities apply to an entity that fails to lodge an approved form required to be given at a date that is on or after 1 July 2017.

    Lodgments to which we apply FTL penalties

    An automated penalty system applies FTL penalty to late-lodged returns, reports and statements, 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.

    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.

    Generally, a penalty will not be applied to 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:

    • FTL penalty was applied before the return or statement was lodged (that is, 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
    • you are classified as a large entity.

    Requesting remission

    If you receive a penalty notice for failing to lodge a return or statement on time, you can ask for a remission, either:

    • in full
    • in part if there are extenuating circumstances – for example, if the failure to lodge was the result of natural disaster or serious illness.

    You can only request remission once you lodge the outstanding returns or statements. We have discretion to reduce (remit) the penalty according to individual circumstances.

    For more information, see PS LA 2011/19 Administration of the penalty for failure to lodge on time.

    Safe harbour from FTL penalty

    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.

    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 does not apply, you can still seek a remission of FTL penalty.

    To request safe harbour exemption of an amount you can:

    Online services for business

    Request safe harbour exemption in Online services for business using Secure mail. Select the topic and subject of your message as below:

    • 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 topic and subject of your message as below:

    • 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
    Last modified: 20 Apr 2022QC 33410