ATO penalties and General Interest Charge

Charged for each 28-day period a return or activity statement is late, up to a cap of five periods. Small-entity rate starts around $313 per period (this number resets with indexation). Medium entities pay 2× the small rate; large entities 5×. FTL is not deductible. The ATO can remit FTL on first lodgement of an overdue obligation if the underlying payment is also remitted promptly.

Apply when an audit finds tax was understated. Rates: 25% for failure to take reasonable care, 50% for recklessness, 75% for intentional disregard. Each rate can be reduced by 20% for voluntary disclosure before the ATO contacts you, or increased by 20% for repeated behaviour. Reasonable-care defence requires evidence — keeping records and acting on them is the protection.

Separate from shortfall penalties. Apply when a return or statement is incorrect even if no extra tax results. Rates similar to shortfall but minimum dollar floors apply ($1,000+ for false statements that didn't cause shortfall). Tax agents have professional-conduct exposure too — we're as motivated as you to get the lodgement right.

Charged on unpaid tax, penalties and interest. Accrues daily, compounds monthly, currently around 11–12% per year (set quarterly, tracks the 90-day Bank Bill Rate plus 7%). Deductible against income tax — small consolation. The compounding is the killer: a $20,000 BAS debt that sits for two years grows materially.

The ATO remits penalties for first-time errors, exceptional circumstances and prompt voluntary disclosure. GIC remission is rarer but possible where unpaid tax was caused by ATO delay or incorrect advice. Payment plans are available for clients in genuine hardship — most small-business plans are 12-24 months. We negotiate these regularly and the ATO is usually reasonable when contact is made early.

· Hiding from the ATO when behind on lodgement — penalties compound while you do · Paying the BAS debt first and ignoring the GIC, only to find the GIC kept growing · Disputing a shortfall penalty without the records to support reasonable care · Not seeking remission when the circumstances genuinely warrant it

The moment you receive any ATO penalty or compliance letter, before the next 28-day period starts. Catching up overdue lodgements + negotiating a payment plan is a one-off engagement we do regularly — usually quoted as a fixed fee scoped to the workload.