OUR SERVICES
ATO Penalties
ATO penalties can double a tax bill. We build the case to reduce or remit administrative penalties and interest,
based on your conduct and circumstances.
based on your conduct and circumstances.
How are ATO penalties calculated?
ATO penalties are a percentage of the tax shortfall, set by your conduct. Failure to take reasonable care is 25 per cent, recklessness 50 per cent, and intentional disregard 75 per cent (ATO: penalties for false or misleading statements).
Reference Case: an employer hit with a 200 per cent Part 7 penalty on late superannuation, on top of the guarantee charge itself.
Reducing your ATO penalty exposure
Base rates move both ways. For example, they rise with a history of non-compliance and fall, sometimes to nil, where there has been a voluntary disclosure or genuine cooperation.
Reference Case: undeclared overseas income disclosed voluntarily, accepted with no penalties imposed.
What about the interest?
General Interest Charge runs daily on unpaid tax and is not discretionary. Moreover, since 1 July 2025 it is no longer deductible, which has sharply raised the real cost of carrying an ATO debt (ATO: denying deductions for ATO interest charges).
WHAT WE HANDLE
ATO penalties we act on
After an audit the tax itself is rarely the whole bill. Administrative penalties and General Interest Charge sit on top, and in serious cases they can double or triple the amount payable.
We prepare remission submissions that set out the facts and the law the Commissioner needs in order to reduce or remove a penalty, and we object where a remission decision goes the wrong way.
OUR PROCESS
How we run a remission
Remission is not automatic and it is not a request for leniency. It is an argument, and it has to be evidenced.
1. Work out what was imposed
We separate shortfall penalty, failure to lodge penalty and interest, because each is remitted on different grounds.
2. Establish the conduct
We test the ATO’s view of your conduct against the facts, since the base rate turns entirely on that finding.
3. Build the submission
We set out the circumstances, the cooperation shown and the law, with documents that support every assertion.
4. Push it through
We follow the decision, and where remission is refused without proper reasons we object.
FAQ
ATO penalties: frequently asked questions
How are ATO penalties calculated?
As a percentage of the tax shortfall, 25% (lack of reasonable care), 50% (recklessness) or 75% (intentional disregard).
Can ATO penalties be reduced?
Yes, through remission, voluntary disclosure and by demonstrating reasonable care or cooperation.
What is shortfall interest charge?
Interest the ATO applies to a tax shortfall for the period before the amended assessment.
Is general interest charge deductible?
No, GIC incurred from 1 July 2025 is no longer tax-deductible, raising the real cost of delay.
KEEP READING
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WHO WE ARE
Why Australian Tax Experts?
Facing a tax problem with the ATO can be one of the most stressful experiences in business or personal life. Whether it is an audit notice, a penalty assessment, or undeclared overseas income, the choices you make in the first days carry the most weight.
At Australian Tax Experts, our specialist tax lawyers and tax accountants work together on every matter, combining legal rigour with precise financial analysis. We do not hand your case between departments. You get both disciplines working in your interest from day one.
Since 2010 we have defended clients against the ATO across offshore income, business audits, superannuation disputes, penalty remissions and complex capital gains tax matters.
If you have a tax concern, whether small or serious, contact us for a confidential consultation. Early engagement is the single most important step you can take.
WATCH
Related videos
What Happens If You Miss the Tax Return Deadline
A missed tax return deadline rarely stays small. The real consequences of non lodgement, from penalties to default assessments.
What Is the General Interest Charge and How to Reduce It
The General Interest Charge accrues daily, compounds relentlessly, and since 1 July 2025 is no longer tax deductible.
How Are ATO Penalties Calculated?
When an audit ends with extra tax to pay, administrative penalties and the General Interest Charge can double the bill. How ATO penalties are calculated.
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