March 01 - Books - Tax Accounting

What to Know About ATO Remissions

One of the reasons it’s so important for us to work with clients, making sure what needs to be lodged is done so and on time, is because the ATO doesn’t shy away from penalising those that don’t. Sometimes, something slips through the cracks in the mayhem of owning your business and you’ll find yourself with a less than ideal message from the ATO. You’re able to apply for a remission of the penalty if you meet certain criteria. Read on to find out how.

How do ATO penalties work?

The ATO may apply penalties to your account where you have not complied with your tax obligations. Penalties can be applied for conduct such as late lodgements, late tax payments and for claiming deductions you are not entitled to.  

The ATO will take your circumstances into consideration when determining whether or not a penalty will apply. In the case of late lodgement penalties, the ATO may assess your lodgement history and frequency of these events occuring. In most cases of an initial late lodgement, the ATO will issue a warning to you in writing. 

How do I request an ATO remission?

Any outstanding lodgements and/or payments need to be up to date before you can request remission of a penalty. 

You can contact the ATO to request remission directly via phone or mail. Alternatively, we can assist to submit a penalty remission request on your behalf. You need to ensure that you have adequate reasoning to support your request for remission and explain the steps you are taking to demonstrate how you will avoid this occuring in the future. 

What does the ATO take into consideration when a remission is requested?

The ATO will assess each remission request independently and take into consideration the following items:

  • Your compliance history
  • Whether tax was deferred or avoided
  • How they became aware of any tax shortfalls
  • Your attitude towards complying with tax laws
  • Your reasoning and the events that led to the conduct which resulted in the penalty

Should your remission request not be successful, there are further steps you can take to object to the ATO’s decision. Further information regarding ATO penalties, remissions and objections can be found via the ATO website.

To ensure you remain compliant and avoid incurring penalties, it’s important that you stay on top of your lodgement and payment obligations. We’re here to support you in meeting these requirements. If you need assistance, or you are unsure as to whether you are currently up to date, please reach out to our office for assistance. Alternatively, you can review your current lodgements and account balances via your myGov Account or Online Services for Business.