Individuals and businesses have a responsibility to fulfil their tax obligations with the Australian Taxation Office (ATO), and those who fail to comply can be stung with hefty fines.

Penalties may be imposed for a range of offences, including making false or misleading statements, not taking reasonable care in claiming deductions you’re not entitled to, failing to lodge a return or statement on time, not withholding the right amounts as required under the PAYG system, or failing to meet other tax obligations.

At LDB, the most common ATO penalties we see for both individuals and businesses are for late lodgements, and interest charges for late payment.

Here’s what to do if you are dissatisfied with a fine.

Request a remission

Penalties will either be calculated using a statutory formula, or multiples of the penalty unit amount, which is currently $180.

The amount will vary depending on the size of the taxpayer (and whether you are an individual or a business), and the overdue time.

If you believe there are extenuating circumstances for the penalty, you can ask the ATO for the penalty to be remitted in full or in part, or we can make the request on your behalf online.

The ATO will consider your lodgement history when making their decision.

Generally, if taxpayers have a good track record and it’s a one-off late lodgement, the ATO will grant the remission request.

When it comes to tax shortfalls or making false or misleading statements in tax documents, you cannot request a remission. Instead, you must dispute the penalty via the objection process.

Why you need us on your side

It’s always best to avoid ATO penalties by being fully aware of lodgement due dates.

As your trusted tax specialist, LDB can act on your behalf and notify the ATO if you’re going to be late lodging.

Often, the ATO is understanding about short delays and will grant an extension, usually of about two weeks.

As professional tax advisers, we keep on top of hundreds of clients’ taxation obligations throughout the year and have systems in place to ensure all paperwork is lodged on time.

Moreover, in some cases we receive additional time for clients to lodge and pay their tax obligations. By way of example, the standard lodgement deadline for an individual is  October 31 each year but for LDB it is usually May 15.

It’s also easier for us to seek extensions, which are often automatically given to tax agents, but not necessarily to an individual or business taxpayer.

Got more questions? Contact us today

For help preparing, lodging or reviewing your tax forms, please get in touch with LDB by phoning (03) 9875 2900 or filling in the contact form below.