Increased Penalty Units: Implications for Taxpayers
Under tax laws, the ATO can impose administrative penalties if you fail to meet your tax obligations.
From 1 July 2023, the base penalty unit has increased by almost 14% to $313.
When the ATO imposes penalties, they can calculate the penalty using either:
- a statutory formula, based on the taxpayers behaviour and the amount of tax avoided; or
- multiples of the base penalty unit.
- Failing to retaining records as required (maximum 20 penalty units = $6,260)
- Failing to register (or cancel) GST registration when required (maximum 20 penalty units = $6,260)
- Failure to lodge a return or statement for a small entity (1 penalty unit for each 28 days late, up to 5 penalty units = $313 to $1,565)
Superannuation funds
The increase in penalty units can impact significantly on superannuation funds. For superannuation funds, the penalty units are imposed per trustee. Where a fund has a corporate trustee, the penalty will be imposed solely on the corporate trustee. However, where a fund has individual trustees, the penalty will be imposed on each trustee. Effectively doubling the penalty where the fund has two individual trustees.
This is another reason that we recommend that a superannuation fund should have a corporate trustee.
It is possible to change the trustee of your superfund to a corporate trustee. Please contact us if you would like to discuss this further.
DISCLAIMER: The information in this article is general in nature and is not a substitute for professional advice. Accordingly, neither TJN Accountants nor any member or employee of TJN Accountants accepts any responsibility for any loss, however caused, as a result of reliance on this general information. We recommend that our formal advice be sought before acting in any of the areas. The article is issued as a helpful guide to clients and for their private information. Therefore it should be regarded as confidential and not be made available to any person without our consent.
Mel hails from New Zealand’s beautiful North Island. She came to Australia in 2008 and has over two decades of experience in public practice. Mel joined TJN Accountants in 2018 and is the trusted advisor to many small businesses. Mel is also the financial controller for #Beatniks Records, an independent music store run by her husband Jayden. Book in to see Mel today.
