Struggling with Late Tax Return Penalties? Here's What You Need to Know

Missed the tax deadline? You could be racking up penalties without even knowing it.
Whether you're an individual or small business owner, the ATO doesn't take late lodgements lightly—and the costs can add up fast. Here's what you need to watch for and how to reduce the damage.

✅ Key takeaways:

• ✅ FTL (Failure to Lodge) Penalty Basics – You’ll be hit with one “penalty unit” every 28 days your return is overdue, up to five units (max $1,565 as of 1 July 2023). 

• ✅ Penalty varies by entity size – Small entities pay 1 unit; medium pay 2; large pay 5 per 28‑day block. 

• ✅ Interest & extra charges – If you owe tax, the ATO adds daily interest (GIC) until payment is made. 

• ✅ Legal risk for persistent delays – Chronic non-compliance may lead to default assessments, court action, or even jail in extreme cases. 

• ✅ Safe harbour relief – If you use a registered tax agent and give them all info on time, you may avoid the FTL penalty if the delay was the agent’s fault. 

• ✅ Remissions available – You can apply to reduce or have penalties waived if delay resulted from serious illness, disaster, or other unavoidable circumstances.

• ✅ Refunds or nil returns? – No FTL penalty applies if you lodge a return that results in a refund or nil obligation (unless already penalised). 

Lodge ASAP—even a late return saves additional penalties and interest. If you're unsure or need assistance requesting remission or safe harbour, Baron Accounting can help.

? Read the full deep-dive here: Penalties for Late Tax Return

? Prefer general guidance and ongoing support? Visit our homepage: Baron Accounting – your trusted tax partner