- March 10, 2014
- Posted by: Michael Ouzounis
- Categories: ATO, Business, GST, Income Tax, Superannuation
Recent revelations have revealed that the ATO is no longer willing to tolerate supporting struggling businesses through financing business operations by way of unpaid tax and superannuation obligations.
In fact, individuals who have been late in lodging their tax returns are being personally targeted by the ATO and as a result, will face harsher penalties against non-compliance with tax laws.
Indeed this may appear to be another wild intimidation tactic to press taxpayers to shape up, however, it looks like the ATO is very serious having already sent around 70,000 letters to tax-evading individuals in an effort to reclaim close to $70 million of late lodgements.
With such a substantial amount of debt being owed, it is apparent that individuals still fail to see the seriousness of ticking off the tax office. The general public need to be aware that as a taxpayer they have a range of obligations under the Taxation Administration Act 1955 (TAA). Those who breach these obligations such as failing to lodge their return are in breach of the law and consequences will apply.
If you happen to be on the ATO hit list, that is you receive one of their letters or you have any outstanding tax returns it is advised that you arrange to see a registered tax agent to have your returns lodged. If you are still convinced that this is all just a storm in a teacup when the ATO does catch up with you and you are late in lodging your returns or activity statements, be prepared to incur penalties and be charged interest on any unpaid amounts.
Companies who still fail to lodge their returns once receiving an ATO compliance notice could face any one of the following outcomes:
- Audit and further ATO investigation
- ATO may estimate the net assessable amount or taxable income and tax owing without further warning
- A business or individual could be referred for prosecution without further warning
- The fines an individual will face if prosecuted and convicted are fines up to $8,500 or 12-month imprisonment. The maximum fine for a company is $42,500.
Business should ensure that their outstanding BAS and PAYG returns are lodged as soon as possible and that all PAYG and superannuation charge amounts are payed within the relevant time frames. Additionally, in going forward ensuring that that all BAS and PAYG returns are up to date and lodged within 3 months of the due date.
If any of this relates to you contact us for more information.