From 1st of July 2018, Australian Tax authorities will not be applying a penalty to tax returns and activity statements where our eligible clients have made an unintentional error by failing to take reasonable care or have not made a reasonably arguable position. If the Tax Authorities find inadvertent errors in our client’s tax return or activity statement they will fix the error and contact you through an approved communication network to let them know how to send the correct one from next time.

The penalty relief applies to business entities and eligible individuals with a turnover of less than $10 million. The entities can be

• Self-managed superannuation funds,

• Small businesses,

• Not-for-profits,

• Strata title bodies,

• Co-operatives

You cannot apply for penalty relief for clients. Authorities will provide it during an audit if you are eligible. If we audit our clients for periods earlier than 1 July 2018, the penalty relief will be applied for those periods. There is a reset period, which means penalty relief will be available once every three years at most. The aim of the authorities is to help you get back on track if you have made an unintentional error.

Penalty relief does not apply to other taxes such as fringe benefits tax (FBT) or the super guarantee (SG).

Those not eligible for penalty relief include:

• Entities that do not meet the small business entity eligibility criteria

• Wealthy individuals and their businesses

• Associates of wealthy individuals that may be classified as a small business entity in their own right

• Public groups, significant global entities and associates

Penalty relief is not available if, in the past three years, you have:

• Been penalized for reckless or intentional disregard of the law

• Evaded tax or committed fraud

• Had penalty relief applied

• Been involved in the control or management of another entity which has evaded tax

• Incurred debts without the intention of being able to pay, such as phoenix activity

If you are looking for more details on the shared topic or anything related to accounting & taxation, Call Reliable Bookkeeping Services now.