You may have noticed that the ATO have been tightening up on outstanding tax lodgements and tax debts over the last couple of months. Last week we saw our first default assessments come through which would probably be the first we have dealt with in my career as an accountant (almost 20 years!).
A default assessment comes about when the ATO makes an estimate of your taxable income due to non-lodgement of the actual tax return. An administrative penalty of 75% of the tax payable applies when a default assessment issues which can be increased by 20% if there is a history of non-compliance. These penalties are in addition to the usual general interest charges that would apply.
If you or your clients/associates have outstanding tax lodgements we recommend you speak to us to help bring them up to date. If the tax is not able to be paid in full, the ATO will generally allow payment arrangements to be put in place which allow the debts to be repaid over several months or years in some cases.
Please Note: Many of the comments in this article are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances.
