Complete business activity and instalment activity statements in Australia

Advanced BAS Topics:

• Lodgement Procedure
• Late Lodgement Penalties

Lodgement Procedure

The taxpayer can lodge the activity statement online via the Internet using the ATO's Business Portal or electronic commerce interface (ECI). These are fast, convenient and secure ways to lodge the BAS/IAS

Registered tax agents and registered BAS agents can help prepare and lodge a taxpayer's activity statement. Most tax agents/BAS agents can lodge activity statements electronically via the electronic lodgement service (ELS).

If the taxpayer has no amount to report at any label due to no business activity during the period, lodgement of the BAS/IAS can be made over the telephone. The ATO's telephone service accepts lodgements for activity statements that are up to six months overdue.

Otherwise, the completed BAS/IAS can be mailed directly to the ATO using the pre- addressed envelope provided.

When mailing the BAS/LAS, the taxpayer must use the official form provided by the ATO. Many commercial accounting software products can produce a document very similar in appearance to the official activity statement. While this document is fine for record keeping purposes, it must not be mailed to the ATO as a substitute for the official form.

The activity statement must be signed and returned to the ATO by the due date, even if the taxpayer has not reported anything on the activity statement.

Late Lodgement Penalties

Late Lodgement Penalties

The penalty for lodging an activity statement late is one penalty unit ($210 for breaches occurring on or after 31 July 2017) for each 28 day period, or part of a period, that the activity statement is outstanding, up to a maximum of 5 penalty units ($1,050)

For a business with an annual turnover between $1 million but less than $20 million, the penalty is multiplied by two.

For a large business with an annual turnover of $20 million or more, the penalty is multiplied by five, resulting in a maximum penalty of $5,250. The ATO has also introduced the concept of Significant Global Entities (SGEs), whose global income exceeds A$1 billion in a year, as part of the Tax Laws Amendment (Combating Multinational Tax Avoidance) Act 2015. Penalties for false statements and Failure-To-Lodge penalties are significantly increased for SGEs, Late lodgement may attract as much as $525,000 FTL penalties (for more than 16 weeks late) for these taxpayers.

The Commissioner of Taxation also has the discretion to remit this penalty. The circumstances of a business, such as the amount of tax payable, the past record of paying tax and lodging tax forms, and the effort made by the taxpayer in trying to meet its tax obligations, will affect whether and how much of the penalties may be remitted.

Q1If Jones Upholstery accidentally lodge their Activity Statement 4 weeks late and it is the first offence,

(a) What would the penalty be (expressed in penalty units)?

(b) Would your answer be different if they had repeatedly lodged late in the past?

(c) Draft an email from the accountant to management to set up a meeting to discuss why it is important that sufficient funds are always available to meet statutory requirements to the ATO.