Those preparing and lodging instalment and business activity statements (IAS/BAS) should be aware the late lodgement penalties increased in the past financial year from $110 a penalty unit to $170 a penalty unit.

It is important to understand that a penalty unit is a 28 day period or part thereof!  That is, if you fail to lodge your IAS/BAS by the due date but, for example, lodge a few days late, then this represents one penalty unit and the penalty amount which will be levied is calculated as follows:

Class:

SMALL PAYG WITHHOLDER

MEDIUM PAYG WITHHOLDER

LARGE PAYG WITHHOLDER

< $25,001
or
income/turnover
< $1million

$25,001 to $1million
or
income/turnover
>$1million <$20million

$1million+
or
income/turnover
>$20million
Rate/unit:

$170

$340

$850

Obviously, if lodgement is later than 28 days, then the penalty is increased depending on how late lodgement is, up to a maximum of 5 units. That is, the maximum penalty may be:

$850

$1,700

$4,250

The definition of a small PAYGW remitter is one with PAYGW deductions of less than $25,001 – this threshold represents 3 employees (any employer proprietors are included in the 3), earning about $52,000 gross each!

You will see how easy it is for small class to become medium class.  The assessable income or annual turnover threshold of $1million will also see apparently small businesses classified as medium with the significant increase in penalties!

Fortunately, registered tax agents lodging on behalf of clients are, in some cases but not all, afforded concessional extended lodgement deadlines.