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.
The Australian Taxation Office (ATO) may apply a "failure to lodge on time penalty" (FTL). The penalty is calculated at the rate of one penalty unit for each period of 28 days or part thereof that the return is overdue, up to a maximum of five penalty units.
If you miss the due date
The due date for payment when you lodge your own tax return is 21 November even if you lodge late. Interest will apply to any amount you owe after 21 November.
You can be fined
You may also have to pay interest on any amount you owe. It is best to lodge on time even if you can't pay the amount you owe. You can usually arrange a payment plan.
If your return is lodged late, you may receive a 'failure to lodge on time' (FTL) penalty. FTL penalties can range from $210 (one penalty unit) to a maximum of $1050 (five penalty units) every 28 days that each document is overdue, depending on how big your business is.
However, if you owe the tax office money and miss the deadline, you'll be fined $280 for every 28 days that your tax return is overdue. Even if the deadline has passed, it's important to lodge as soon as possible. The easiest option to avoid potential penalties is by going through an accountant.
You can avoid a penalty by filing accurate returns, paying your tax by the due date, and furnishing any information returns timely. If you can't do so, you can apply for an extension of time to file or a payment plan.
Failing to lodge a tax return can result in criminal charges, a criminal record and even a jail sentence. The offence is committed by failing to lodge a tax return with the Australian Taxation Office.
How it works. You must agree to a payment plan that allows the amounts owed to be paid by direct debit within 12 months. Even if you receive a letter stating that interest will apply, it will be remitted as long as you maintain your payment plan.
You earned less than $18,200, but paid tax on your income
Even though you earned under the new tax free threshold, as you paid tax on your income during the year, you should lodge a tax return. In this situation it's likely you may get all of the tax you paid throughout the year back after you lodge your tax return.
But you still need to contact a tax agent before the deadline closes on October 31 to arrange your tax return.
Non-Lodgement Advice
If you earn less than the tax-free threshold, you generally won't pay tax. You won't have to lodge a tax return, but you may be entitled to receive back to tax you may have paid. You'll need to lodge a tax return to receive that money.
If you get a taxable Centrelink payment, you may need to lodge a tax return at the end of the tax year. You'll get a Centrelink payment summary if you get any of these taxable Centrelink payments: ABSTUDY Living Allowance, if you're 16 or older. Age Pension.
You must lodge a tax return if any of the following apply to you. You: had tax withheld from any payments (such as wages) made to you during the income year. are an Australian resident and your taxable income was more than the tax-free threshold ($18,200)
It's important to be aware that a continuing failing to lodge a federal tax return can lead to charges of tax fraud, also known as tax evasion, which can be punishable by up to 10 years in prison.
Two or four years from the date the assessment was given to you: two years for most individuals and small businesses. two years for most medium businesses (see note 2) four years for all other taxpayers (see note 3).
A future-year return is a return lodged before the end of the current reporting period, for example, a 2021–22 tax return lodged before the end of the 2022 financial year. Future year lodgments must be made no later than 15 June. Alternatively, the lodgment can be made as normal after 1 July.
Tax-free threshold and tax rates
If you're an Australian resident, the first $18,200 you earn is tax-free. This is known as the tax-free threshold. You can claim the tax-free threshold when you complete your TFN declaration with your employer.
Lodge tax return for all entities with a lodgment due date of 15 May 2023 if the tax return is not required earlier and both of the following criteria are met: non-taxable or a credit assessment in latest year lodged.
If you did not file your ITR by December 31, 2021, you now have until March 31, 2022 to do so. You should, however, pay a penalty for this. In order to make up for the deferral, late filers must pay penalties.
So what happens if you miss the tax deadline? Failure-to-lodge penalties range from $222 for individuals and small businesses and up to $11,000 for large businesses. The $222 penalty can actually increase every 28 days, up to five times until you lodge which means the fine could grow to $1,110 over five months.
If you earn less than $18,200 from all sources, you won't pay tax but you will pay on the excess over $18,200. In dollars and cents, the $18,200 tax-free threshold equates to: $350 a week. $700 a fortnight.
If you don't claim the tax-free threshold for any of your jobs or income sources, you will pay a higher tax rate during the year but receive the equivalent back in a large tax return at the end of the financial year.