Non-Lodgement Advice: Everything You Need to Know About Notifying the ATO

Estimated reading time: 7 minutes

Key Takeaways

• Understanding when and how to notify the ATO with non-lodgement advice is crucial.
• Non-lodgement advice helps avoid unnecessary paperwork and penalties.
• It’s important for both individuals and businesses.

Understanding Non-Lodgement Advice and Why It Matters

Non-lodgement advice is an essential notification process that many Australian taxpayers overlook. This formal communication with the Australian Taxation Office (ATO) informs them that you aren’t required to submit a tax return for a specific financial year. Whether you’re an individual with minimal income or a dormant business entity, understanding when and how to lodge this notification can save you from unnecessary stress, paperwork, and potential penalties.

Who Should Submit Non-Lodgement Advice?

Not everyone needs to lodge a tax return every year. After reviewing your financial circumstances, you might discover you’re not obligated to submit one at all. Non-lodgement advice is ideal for several common situations.

For Individuals:

• Students with minimal part-time work
• Retirees with limited income
• People who were unemployed for substantial portions of the financial year
• Those whose income was entirely covered by tax offsets

For example, a university student who worked occasionally throughout the year earning only $15,000 would fall below the tax-free threshold. By submitting non-lodgement advice, they inform the ATO of their situation without completing an unnecessary tax return.

When a Tax Return Is Still Required

Despite having low income or minimal financial activity, certain circumstances still require you to lodge a full tax return. It’s crucial to understand these exceptions to avoid compliance issues.

• Tax was withheld from your income during the year, even if your total earnings were below the tax-free threshold. This often happens with casual or part-time employment where your employer deducts tax from your wages. Learn more
• You have outstanding HELP or HECS debts and you live overseas. These loans require repayment once your income reaches certain thresholds.
• You receive Centrelink benefits or are involved in child support arrangements, as these systems often require tax return information to calculate entitlements or obligations.
• You have an active Australian Business Number (ABN) with Pay As You Go (PAYG) withholding or instalment obligations, as these registrations create specific reporting requirements. Learn more
• You’re seeking a refund of franking credits from investments, which requires lodging a return to claim these credits.

For example, if you earned only $15,000 but your employer withheld $2,000 in tax, you would need to lodge a full tax return to receive a refund.

How to Lodge Non-Lodgement Advice: Step-by-Step Guide

Submitting non-lodgement advice is straightforward. Ensure you have your tax file number and personal details ready.

Option 1: Online Through ATO Online Services (via myGov)

1. Log into your myGov account at my.gov.au
2. Ensure your ATO account is linked to myGov.
3. Select the Australian Taxation Office service.
4. Navigate to the “Tax” menu.
5. Select “Lodgments” from the dropdown options.
6. Click on “Non-lodgement advice”.
7. Follow the prompts to complete the form, including selecting the relevant financial year(s).
8. Submit the form.

The online system will immediately record your non-lodgement advice and provide confirmation.

Option 2: Paper Form Submission

1. Visit the ATO website to download the non-lodgement advice form.
2. Print the form.
3. Complete all required fields, including your personal details and the relevant financial year(s).
4. Sign and date the document.
5. Mail the completed form to the address specified on the form.

The paper method takes longer to process, but the ATO will eventually update your records.

Important Timeframes and Backdating Options

The non-lodgement advice system is flexible regarding timeframes:

• You can submit non-lodgement advice for income years dating back to 2000.
• Submit multiple advices at once for past years.
• Indicate that your circumstances will remain the same for future years.

This flexibility is valuable if you’ve only recently realised you should have submitted non-lodgement advice in previous years. You can quickly update your status with the ATO.

For instance, if you haven’t lodged returns for 2018, 2019, and 2020 because your income was below the threshold, you can submit non-lodgement advice for all three years simultaneously to regularize your tax status. Learn more

Non-Lodgement Advice for Businesses: Special Considerations

The process is similar for businesses, but with additional considerations:

For Companies and Trusts:

1. The director or trustee should submit non-lodgement advice for the entity.
2. Include the company’s Australian Business Number (ABN) and Tax File Number (TFN).
3. Specify the relevant financial year(s).
4. Provide a brief explanation of why no return is required (e.g., “Company dormant” or “No business activity”).

This maintains compliance without the need for full company tax returns during periods of inactivity. Learn more

For Tax Professionals and Agents:

• Registered tax agents can use specific forms to notify the ATO on behalf of multiple clients simultaneously.
• The ATO provides dedicated portals for tax professionals to manage non-lodgement advice for their clients.
• Bulk processing options are available for accounting practices with numerous non-lodging clients.

This efficiency is valuable for accounting practices managing portfolios of small businesses. Learn more

The Crucial Importance of Lodging Non-Lodgement Advice

Many believe that if they don’t need to lodge a tax return, no action is required. This can lead to easily avoidable problems.

Benefits of Accurate Records:

• Ensures your tax history is complete and accurate in ATO systems.
• Creates a clear record of your compliance with tax obligations.
• Prevents gaps in your tax lodgement history.
• Documents your tax status for each financial year.

Avoiding Administrative Problems:

• Without proper notification, you might face:
• Repeated reminder letters from the ATO about “overdue” tax returns.
• Potential penalties for non-lodgement.
• Compliance checks or audits.
• Difficulties when applying for loans or government services.

Peace of Mind:

• Knowing your tax affairs are in order provides peace of mind.
• You can confidently answer questions about your tax compliance.
• You avoid unexpected communications from the ATO.
• You maintain a clear record of your tax status.
• You avoid the stress of wondering whether you’ve met your obligations.

Learn more

Late or Backdated Non-Lodgement Advice: It’s Never Too Late

If you’ve only recently discovered you should have been submitting non-lodgement advice, don’t panic. The system accommodates late submissions.

• You can submit non-lodgement advice for any year from 2000 onwards.

Frequently Asked Questions

1. What is non-lodgement advice?
2. Who needs to submit non-lodgement advice?
3. How do I submit non-lodgement advice?
4. What are the penalties for not submitting non-lodgement advice?