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Penalty relief for taxpayers

From 1 July 2018, the Tax Office is advising Australians that if they find an error in their tax return or activity statement they will not incur a penalty but will advise of the error and how to get it right next time.

Penalty relief will only apply to eligible taxpayers or entities (i.e., turnover of less than $10 million) every three years.

These may include:
– Small businesses
– Co-operatives
– Self-managed super funds (SMSFs)
– Not-for-profit organisations

Eligible individuals will only be given penalty relief on their tax return or activity statement if they make an inadvertent error because they either:
– took a position on income tax that is not reasonably arguable, or
– failed to take reasonable care

The ATO will not provide penalty relief when individuals have (in the past three years):
Received penalty relief
– Avoided tax payment or committed fraud
– Accrued taxation debts with no intention of being able to pay (i.e., phoenix activity)
– Previously penalised for reckless or intentional disregard of the law
– Participated in the management or control of another entity which has evaded tax.

Individuals can not apply for penalty relief. The ATO is reminding individuals that they will provide relief during an audit should it apply.

Penalty relief will not be applied to:
– Wealthy individuals and their businesses
– Associates of wealthy individuals (that may be deemed a small business entity in their own right)
– Public groups, significant global entities and associates

Penalty relief will also not be applied to certain taxes, i.e., fringe benefits tax (FBT) or super guarantee (SG).

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News

Do you know where your super is?

February 21, 2019

If you’re not close to retiring, you may not be thinking about your super or where it is. Even if you are a way off from retiring, you should be keeping track of where your super has gone. $17.5 billion of super was lost in 2017-18, $420 million down from the previous year. If you are not paying attention to your super contributions, accounts and insurances, you may have lost super. You may also have unintentionally lost track of super if you have ever changed your name, address, job or lived overseas.

It is not uncommon for people to have multiple super accounts they have acquired over the years of working at different companies. Having multiple unused accounts can result in high fees that drain your untouched super or you could lose track of it completely. It is in your best interest to consolidate all super into one account that suits your retirement goals. When closing unused accounts, you should be mindful of any termination fees, insurance policies, investment options, and ongoing service fees.

If you have lost track of your super it may be held by either your super fund as a lost account or as an ATO-held account. The easiest way to consolidate super is through the myGov website, linking the ATO to records of your super funds