Question:
75% penalty for non-lodging returns
Answer:
Recent changes are outlined below:
July 1, 2022
- Loss carry back for eligible companies extended to cover 2023 income year.
- Professional firm profits diverted to the professional's spouse or other associates to be reviewed under new Tax Office guidance.
- Corporate collective investment vehicle legislative regime introduced.
- Temporary full expensing of depreciating assets extended to include 2023 income year.
- Depreciable assets of a company joining a tax consolidation group have tax costs setting rules modified for assets depreciated under temporary full expensing rules.
December 9, 2021
- Reduced Pandemic leave disaster payment of $750 per week made available through to 30 June 2022.
August 5, 2021
- COVID-19 Disaster Payments are non-assessable non-exempt income in 2021 income year and later. Payments phasing out as vaccination rates increase.
July 1, 2021
- New Investment Engagement Service launched for businesses planning significant new investments in Australia.
- Tax Office small business independent review service made permanent for businesses with turnover < $10m, for income tax, GST, exercise, luxury car tax, wine equalisation tax and fuel tax credits. Requested before amended assessment issued.
- Small business income tax offset for individuals increased to provide a reduction of 16% for a tax payable up to $1,000.
- Self-managed superannuation funds can now have six members, increased from four members previously.
July 1, 2021
- Some COVID -19 state and territory business grants received by small and medium enterprises are non-assessable, non-exempt income for 2021 and 2022 income years.
- Certain state, territory and local government financial support for individuals and businesses suffering COVID-19 impacts made exempt where businesses have turnover less than $50 million and only in eligible programs.
March 31, 2021
- JobKeeper payments scheme ended.
October 5, 2020
- Boosting apprenticeship commencements subsidy (up to 50% of apprentice's wages) is assessable income.
June 4, 2020
- Homebuilder grant for new home or substantial renovation construction is not subject to income tax.
April 1, 2020
- COVID-19 cash flow boost payments are not subject to income tax
The Tribunal has confirmed 75% shortfall penalties on a company and its sole director for not lodging returns in the 2005 income year.
The Tax Office can impose a monetary penalty based on a percentage of the underlying tax obligation for lack of care.In this case, the director had personal tax of $13,497 due and a penalty of $10,535. The company had $86,760 of tax and a penalty of $65,070.
The director argued that returns could not be lodged due to a breakdown in the relationship with their former accountant and also because he suffered a break-in at the office, ill health and thought the returns had been lodged by the former accountant.
The Tribunal did not accept the evidence about the break-in and concluded that the bank statements, cheque butts and Quickbook accounting records were still available.Accordingly, the Tribunal upheld the 75% penalties.
Even if you are running late, you should take action to get overdue tax returns lodged to avoid such large penalties.
AAT Case [2012] AATA 3, WTB 50
