What Happens If You Don't Lodge A Tax Return?

By H&R Block 7 min read

If you earn more than the  tax-free threshold  which currently stands at $18,200, you're required to lodge a tax return. In some cases you may even be required to lodge if you earn less than that amount – we can help you determine whether you're required to lodge, so, if you haven't lodged a tax return, it's not too late.

Generally, you need to lodge an income tax return every year. However, for a long list of reasons – too busy, overseas, or found that it was just too complicated - you may not have got around to it. If you haven't lodged a tax return for a few years or you have one outstanding or overdue – no matter your reason – get up to date for peace of mind. If you don't lodge, the ATO can apply a number of sanctions and penalties to force you to lodge or penalise you for lodging late. Our tax consultants can help you with all your neglected returns, just call 13 23 25 or  find your nearest office today and book an appointment.

What if I don't need to lodge a tax return?

If you earned less than $18,200 and didn't pay any tax, you may not be required to lodge a tax return. However, it's important to submit a non-lodgement advice to the ATO which explains that you don't need to lodge and ensures they don't list you as having an outstanding return. Without a non-lodgment advice, the ATO will assume you need to lodge and may take compliance action in order to force you to. We can prepare and lodge your non-lodgement advice.

What's the fine if I don't lodge a tax return?

Firstly, the ATO will issue you a Failure To Lodge (FTL) penalty if your tax return isn't lodged by the due date. This fine is calculated at the rate of one penalty unit for each period of 28 days or part thereof that the document is overdue, up to a maximum of five penalty units. The value of a penalty unit is currently $313 per 28 day period.

The penalty is normally applied automatically but is not normally applied to returns with either a nil result or which generate a refund. Where a penalty is applied, the ATO will sometimes remit it where it's 'fair and reasonable to do so,' such as in the event of natural disaster or serious illness.

Are there penalties for lodging a late tax return?

Where penalties have failed to get you to lodge a return, especially where you have several years outstanding, the ATO can issue you with one or more default assessments. This is basically an estimated assessment of your income, based on data held by the ATO.

As these are estimates, they're rarely correct and often show a higher tax liability than you would actually owe as they don't take deductions into account. You're able to appeal a default assessment, however, you must be able to show what your actual tax liability is. Simply arguing that the ATO's figures aren't correct isn't enough.  

Will I get prosecuted if I don't lodge a tax return?

Even though it's not common, the ATO can and does prosecute for failing to lodge tax returns.  The maximum penalty which can be applied on prosecution is now $9,000 or imprisonment for up to 12 months.

Will I get audited if I don't lodge a tax return?

If you lodge late, it's widely believed you're at increased risk of being reviewed or  audited by the ATO. If you use H&R Block to lodge your  late tax returns, your tax consultant will be equipped and ready to answer questions if the ATO raise them.

What should I do if I haven't lodged my tax return?

If you've got one or more tax returns outstanding, the ATO will catch up with you. Take pre-emptive measures against this and get your tax returns up to date ASAP. We make the catching-up process as painless as possible. Where there's a possibility penalties can be remitted, we'll make a case on your behalf to the ATO.

If you have missing income information, we can often fill in the gaps by obtaining pre-filled information sent to the ATO by third parties such as banks and employers. Where you haven't kept records of deductions, we'll work with you to establish what you can claim.

H&R Block can help lodge your late tax return

Getting your tax returns up to date can also help you catch up with entitlements such as the superannuation co-contribution and family tax benefits. You'll pay standard fees upfront but if your late lodgements return a refund, you can take advantage of our Fee-From-Refund service where your fee is deducted from your refund. If it emerges that you didn't need to lodge a return for some of your outstanding years, we'll submit a non-lodgement advice on your behalf.

H&R Block can help

H&R Block can help you minimise the risk by lodging a late tax return on your behalf. You can also  lodge your on-time return  online or in one of our many office locations around Australia.

September 2020

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