An overdue tax return simply means you haven’t submitted your tax paperwork by the deadline set by the government. Think of it like a deadline for a task—except this task involves organizing your financial information and sending it to the tax office. Originally published at https://taxly.ai/tax-returns/overdue-tax-return/

1. Overdue Tax Return – ATO Tax
Lodgement Advice
An overdue tax return simply means you haven’t submitted
your tax paperwork by the deadline set by the government.
Think of it like a deadline for a task—except this task
involves organizing your financial information and sending it
to the tax office.
Safe & Secure
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2. What is the FTL Penalty on Overdue Tax
Return?
An FTL (Failure to Lodge) penalty comes into play when you miss the deadline
for submitting your tax-related documents, such as tax returns, reporting PAYG
installments, or GST/PAYG withholding on an activity statement.
However, it’s not an immediate slap on the wrist. Sometimes life gets busy, and
despite your best efforts, you might miss the due date. The tax office
understands this and doesn’t rush to penalize for a one-off late lodgment.
Your circumstances matter here. ATO considers various factors before taking
any action. For instance, if you forget to lodge, they’ll likely give you a heads-up
through a phone call or a written warning. They want to make sure you’re
aware of the situation.
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3. How are FLT Penalties Calculated?
Calculating the FTL penalty isn’t a one-size-fits-all deal. It varies based on
the size of your business and how long it’s been since the lodgment due
date. Smaller entities might face a different penalty calculation compared to
larger ones.
Small Entities FTL Penalties:
These are generally smaller businesses or individuals with relatively lower
turnover or income. The criteria for defining a small entity may vary across
different tax obligations but often involve businesses with limited annual
turnover or income.
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4. Medium Entities FTL Penalties:
A ‘medium entity’ is one that acts as a medium withholder for PAYG
withholding purposes or has assessable income or current GST turnover
exceeding $1 million but less than $20 million.
Large Entities FTL Penalties:
A ‘large entity’ refers to a significant business or individual with substantial
financial operations, having assessable income or current GST turnover of $20
million or more.
Significant Entities (Global) FTL Penalties:
FTL penalties for significant global entities apply to those that fail to lodge an
approved form required on or after 1 July 2017. These are typically
multinational corporations or entities with a significant global presence.
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5. Overdue Tax Returns to which FLT Penalties are Applied
Now, ATO uses a system that automatically slaps a penalty on late
submissions. This penalty can apply to various things you need to submit,
like your activity statements, tax returns, reports about fringe benefits tax
(FBT), annual GST returns, and more.
Automated FTL Penalties:
Applied to late-lodged returns, reports, and statements including:
● Activity statements
● Tax returns
● FBT (Fringe Benefits Tax) returns
● PAYG (Pay As You Go) withholding annual reports
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6. Exceptions for Penalties on Certain Lodgments:
But here’s a heads-up: not every late submission gets hit with a penalty. If
you’re late but you don’t owe any extra taxes, maybe because you’re owed a
refund or you didn’t make any extra money, they usually won’t penalize you.
Can you Avoid Overdue Tax Return FLT
Penalties?
If you receive a penalty notice for failing to lodge on time, you can request a
remission if there are extenuating circumstances.
The ATO has the discretion to reduce (remit) the penalty based on your
individual circumstances.
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7. How to request Remission
Contact the ATO:
Reach out to the ATO through their official channels, such as their website’s
secure messaging or by phone.
Provide Detailed Information:
Explain your situation thoroughly, outlining the circumstances that caused the
late lodgment. Include specific details and any supporting documents that
can validate your case.
Highlight Extenuating Circumstances:
Emphasize any extenuating circumstances that affected your ability to lodge
on time, such as a serious illness, unexpected events, or a natural disaster.
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8. Request Type:
Clearly state whether you are seeking a full or partial remission. Be specific
about the amount you’re requesting for reduction or cancellation.
Demonstrate Effort:
Show your efforts to rectify the situation, such as attempting to lodge or
resolve the late submission promptly once the issue was recognized.
Use Official ATO Channels:
If possible, use the ATO’s designated forms or secure communication channels
available through their online services for submitting your request.
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9. How to Be Safe from FLT Penalties?
The safe harbour provision shields you from an FTL (Failure to Lodge) penalty if
you hired a registered tax agent or BAS (Business Activity Statement) agent to
lodge your tax return or statement, given that both conditions below are met:
You Provided Relevant Information:
You must demonstrate that you supplied all necessary tax information to your
agent on time, enabling them to lodge your return or statement by the due
date.
Agent’s Failure Was Not Reckless or Intentional:
The agent’s failure to lodge your return or statement must not stem from
recklessness or intentional disregard of the law.
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10. Safe Harbour Exemptions:
For Amounts Below $10,000:
Call the Australian Taxation Office (ATO) to request the safe harbour
exemption. They’ll assist you over the phone.
For Amounts of $10,000 or More:
Write a detailed explanation to the ATO outlining why there was a delay in
lodging your return or statement. Describe the circumstances that caused the
delay and provide reasons why you believe the safe harbour exemption should
apply.
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11. www.taxly.a
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The Bottomline
Overdue tax return may result in FLT penalties, so it’s
crucial to lodge a tax return even if past the due date.
Seek guidance from a tax professional if necessary. If
eligible, ask for remission of penalties due to genuine
reasons like illness or unexpected events. Timely
action can minimize penalties and avoid further
complications with the tax office.

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