So the BAS lodgement date came and went and you didn’t get around to lodging your BAS – what happens now? The Australian Tax Office (ATO) doesn’t look favorably on this behaviour. If they see fit, you may just find yourself having to pay late lodgement penalties. What are these penalties and how much will you have to pay if charged?
If you do not lodge your BAS (and other assorted tax-related forms) by the given due date, the ATO can hit you with a ‘failure to lodge on time” (FTL) penalty.
How much is the FTL penalty?
As of 28 Dec 2012, the FTL penalty is $170.00 and is charged every 28 days up to a maximum of five 28 day periods in which the BAS is not lodged on time.
Therefore, the longer you take to lodge your BAS after the due date, the higher the penalty amount that may be applied!
But the news gets worse……..
If your entity is classed as a medium size business (annual turnover of 1M up to 20M), the $170 fine is doubled and if it is classed as a large entity (annual turnover of 20M or more), the fine is multiplied by a factor of five – ouch!
Also, if the BAS is not lodged within 113 days of the lodgement due date, the ATO may apply the maximum amount of the FTL penalty.
Is there a way to avoid the penalty?
Well besides the obvious thing i.e. lodging your BAS on time, you can avoid the penalty by simply contacting the ATO and explaining why it wasn’t lodged (132861 for personal tax and 132866 for business tax). Even better, it is best to contact the ATO before the lodgement due date if you know ahead of time that you won’t be able to lodge. The ATO are actually very good to deal with on the whole and if you contact them, you will probably find that the penalty will be waived and you will be given an extension of time in which to lodge. Note, if you have already received a FTL notice and/or been contacted by the ATO about the late lodgement, it may be too late. Having said that, it is still worth your time (and dollars) to ring them and discuss your options.
if you stick your head in the sand and don’t contact the ATO, it is most likely that you will receive a FTL penalty. My advice – use your brains! Call them!
What else can I do?
If you have an AUSkey and have access to the ATO business portal, you can request an extension of lodgement using the secure portal mail.
Also, if you believe that the circumstances which led to your late lodgement warrant a remission of the penalty, you can apply to the ATO for the remission. You must do this in writing either via the portal mail or via a letter and send it to the address as shown below.
What if it is my tax agent or BAS agent’s fault that the document is lodged late?
If your tax/BAS agent did not lodge your BAS on time and you can prove that you gave all of the relevant information to him in time, you can request that the safe harbour provisions be applied. You can make the request via the portal mail in your ATO business portal or write a letter and send it to:
Australian Taxation Office
PO Box 327
ALBURY NSW 2640
or Fax: 1300 139 045
Is the FTL penalty a tax deduction?
Short answer – nope!
So there you have it – the whys and wherefores of the FTL penalty. As you can see, it’s pretty hefty but you can avoid it by simply lodging on time – a no-brainer really! Also, if your tax or BAS agent lodges on your behalf, make sure you provide him/her with your source documents well before the lodgement due date. Your agent will always lodge on time if you have done this but if you haven’t, be prepared to cop the penalty in full! No amount of safe harbour provisions will save you in this case!