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ATO Penalties And Interest Charges

With the Australian Taxation Office (ATO) cracking down on anti-compliance, their penalties and interest charges continue to be on the stricter side. This article provides an overview of these penalties and the current interest rates.

1. Penalties for Non-Compliance

The ATO imposes administrative penalties for two key reasons:

  • False or misleading statements
  • Failure to lodge documents on time

A. False or Misleading Statements

Penalties may apply if a taxpayer makes a false or misleading statement. The term “false and misleading” is hazy, but taxpayers can avoid penalties if they demonstrate adequate care.

Once it can be concluded that the taxpayer has made a false or misleading statement, or they have failed to take reasonable care – the applicable penalties are calculated as follows:

As of July 1, 2024, a penalty unit is valued at $330. Penalties are doubled for significant global entities.

Shortfall amount refers to the additional tax payable after the impact of the false or misleading statement is removed from one’s tax liability calculations.

The taxpayer may be liable for additional penalties if the taxpayer obstructs the ATO or fails to disclose errors after discovering them.

B. Failure to Lodge Documents on Time

Penalties are also applicable on failure to lodge documents, such as Income Tax Returns and Business Activity Statements on time.

Penalty amounts vary by the type of entity.

2. Interest Charges

The ATO imposes interest charges on liabilities in two primary ways:

A. Shortfall Interest Charge (SIC)

SIC applies when a document lodged with the ATO is amended and the amendment results in amounts being payable. It is the base interest rate* plus 3% and calculated on a daily basis for every day between the due date of the original lodgement and the amendment. It is not compounded.

B. General Interest Charge (GIC)

When SIC is not applicable, the GIC is applied. This generally involves amounts which have not been settled by their respective due dates.

GIC is compounded daily and stands to be the base interest rate plus 7%.

*Base interest rate is the average yield on a 90-day bank bill published by the RBA.

date.

How to avoid Penalties and Interest?

To minimize penalties and interest:

  • Regularly check deadlines and obligations.
  • If you anticipate issues, contact the ATO proactively
  • Consult a tax advisor for guidance on compliance.

Ready For Change Tools

Research tells us there is only a 30% probability your personal or business change initiative will succeed. This is because most people adopt a ‘trial and error’ approach to change incurring a high cost in lost time, reduced confidence, wasted money and poor resource utilisation. But you can dramatically improve this probability of personal change success using the Mindshop

Change Success Diagnostic to identify areas for improvement and implementing strategies to achieve change success.

Developed by Mindshop founder, Dr Chris Mason following an 8-year PhD on the subject, the change success personal model will identify the following:

  1. your personal change potential percentage (an ideal success score being a minimum of 78%); and
  2. which one of the change success factors has the biggest gap between where you are NOW and the maximum WHERE score.

Use this report to guide the implementation of strategies to boost your potential for change success by lifting the scores where you have the greatest gap between NOW and WHERE.

By undertaking this diagnostic you agree to the Privacy Policy and Terms of Use.

RECAP: Harris Black Business Leaders Forum – August 2024

In this workshop, we looked at ‘Working smarter: How to succeed in an ever-changing landscape beyond 2024’.

Attendees learnt practical ways to boost agility, efficiency and impact by tapping into the power of the “second brain“. We assessed readiness for personal change success and found solutions to overcome agility barriers. Attendees were brought up to speed with the latest insights on attracting and keeping top talent while adapting to shifts in workforce dynamics. All then wrapped up and concluded with the attendees tackling day-to-day agility challenges head-on in a problem-solving roundtable, where they collaborate with fellow leaders. 

If you are interested in joining our practical and high-value learning sessions, we would like to invite you to join us at the next Harris Black Business Leaders Forum on the 14 November 2024. Click the button below to register your interest. 

Harris Black Annual Staff Day: Team Building, Professional Development and Giving Back

Our annual staff day at Harris Black is always a highlight of the year, and this time was no exception. The day began with a recap of the previous year and a review of our strategy, setting the stage for a productive and insightful day ahead.

We were then treated to an inspiring presentation by Petris Lapis on building relationship tools, which provided valuable insights into enhancing our interpersonal skills. After a refreshing morning tea, we delved into a presentation on client experience, followed by a brainstorming session to explore ways to improve our client interactions.

The afternoon was filled with engaging team-building activities led by the team from Character Builders. We split into teams to attempt building the tallest tower out of balloons, which was both challenging and fun. Later, we came together as one big group to build thousands of dominos, a task that required coordination and teamwork. After a well-deserved afternoon tea, we participated in activities called “Big Ups” and “X Marks the Spot,” which further strengthened our team spirit.

The day wrapped up with a delightful dinner at Ma Pa Me, where we enjoyed delicious food and great company. It was the perfect way to unwind and celebrate our achievements as a team.

Our annual staff day is more than just a day out of the office; it’s an opportunity to strengthen our team, grow professionally, and give back to the community. We’re already looking forward to next year’s event and the new experiences it will bring.

Harris Black Celebrations

We are thrilled to announce that Olivia Beckett and Keziah Sedgwick have been promoted from Associate to Principal.

Over the years, Olivia has not only excelled in her technical proficiency but also in her leadership. Her collaborative approach and ability to mentor younger staff have strengthened the firm’s culture of knowledge-sharing and professional growth. Olivia’s focus on nurturing client relationships and her drive for innovation within the accounting space have been instrumental in positioning the firm as a forward-thinking organization.

Her promotion to Principal is a reflection of her dedication to both her clients and colleagues, and we are excited to see her continue to shape the future of Harris Black in this new role.

Keziah Sedgwick has made a profound impact at Harris Black through her commitment to her clients and the firm. Known for her strategic thinking and problem-solving abilities. Her ability to foster strong relationships with clients, coupled with her deep expertise in accounting and financial advisory, has solidified her reputation as a trusted advisor.

Keziah is not only a standout professional but also a dedicated mentor. Her passion for guiding and developing the next generation of professionals has been a cornerstone of her leadership style. She is a driving force behind team success and is respected for her ability to inspire others to reach their full potential.

Congratulations to Olivia and Keziah on this significant career milestone! We look forward to celebrating many more of their achievements in the years to come.

Harris Black Conquers The WLSQ River To Rooftop Challenge

Harris Black is proud to announce our successful participation in the Women’s Legal Service Queensland (WLSQ) River to Rooftop challenge. Our team, the Harris Black Excelerators, climbed the 1,040 steps of One One One Eagle Street, all the way from the river to the rooftop, to raise funds for women and children experiencing domestic violence.

The event was a fantastic team-building exercise, bringing together staff members from various departments. Our collective effort paid off, and we are thrilled to have contributed to such a meaningful cause. The funds raised will help WLSQ provide free legal and welfare assistance to those in need.

We extend our heartfelt thanks to our clients, partners, and friends who supported us through donations and encouragement. Your contributions made a significant difference and helped us reach new heights.

Together, we made a positive impact on our community. Thank you for being part of this journey with us!

How can we help you?

Today’s financial environment demands a regular review of strategy and a focus on execution.