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, lodging your tax return, reporting PAYG instalments, GST or PAYG withholding on an activity statement by the due date.
If you use an agent, safe harbour provisions may protect you.
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 will depend on the size of the entity and the period of time since the due date for lodgment.
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.
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.
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.
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.
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.
If you receive a penalty notice for failing to lodge a return or statement on time, you can ask for a remission if there are extenuating circumstances. We have discretion to reduce (remit) the penalty according to your individual circumstances.
Extenuating circumstances may include situations such as, being impacted by a natural disaster or serious illness. It can also include other circumstances outside of your control which could not be predicted, and you or your agent were not in a position to request further time to lodge.
You can ask for either a remission:
- in full
- in part.
You can only request remission once you lodge the outstanding returns or statements.
FTL remission requests will be considered by an officer independent of the decision to impose the penalty.
For more information, see PS LA 2011/19 Administration of the penalty for failure to lodge.
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:
- 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.
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)
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)
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