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In recent months there has been an increase in activity by the ATO against businesses who are behind in the lodgement of their Business Activity Statements (BAS) and Returns. This recent crackdown means that many companies and their Directors face the possibility of prosecution or fines if they do not comply with their statutory obligations.
Consequences for not lodging Activity Statements and Returns
If you are late in lodging your Returns or Activity Statements you will incur penalties and be charged a daily interest rate currently 9.59% on any unpaid monies.
Once a company has received an ATO Compliance Notice and still fails to lodge their returns, they could face the following repercussions:-
• An audit and face further investigation from the ATO
• The ATO may estimate their net assessable amount or taxable income and the tax they owe without further warning
• A business or individual could be referred for prosecution without further warning
• If prosecuted and convicted, an individual could be fined up to $8,500.00 or imprisoned for up to 12 months, for a company the maximum fine is $42,500.00.
Advice to clients
You should :-
• Ensure all outstanding BAS and PAYG returns are lodged as soon as possible
• Pay all PAYG superannuation charge amounts within the relevant time frames
• Keep all BAS and PAYG returns up to date and lodged within 3 months of the due date
If a BAS return is lodged or a PAYG is not paid, the ATO may issue a Director Penalty Notice. At the expiry of the 21 day notice period, personal liability can apply. Director’s personal liability for a company’s unpaid PAYG will be avoided if a company enters into voluntary administration or has a liquidator appointed before the expiry of the Director Penalty Notice. If unpaid PAYG is not recorded within 3 months of the due date the Director will automatically be personally liable for any unpaid amounts even if the company is placed in voluntary administration or liquidation after this date.
If you have any overdue paid BAS and/or PAYG returns and/or overdue PAYG superannuation charge payments contact us immediately to discuss your options.