Here are a couple of scenarios involving people/businesses with overdue BAS’s that was recently sourced from the ATO website. If these circumstances are familiar to you then give us a call asap to get it sorted out:
Example 1: Conviction and heavy fine for failing to lodge
For as long as Ben could remember, his family had owned Wish Jewellers. Throughout his twenties he worked in the family business, specialising in designing custom pieces and accompanying his father on trips around the world sourcing precious stones and diamonds. When his father announced he would be retiring from the business, he could think of no one better than Ben to take control.
Ben, like other business owners, worked long hours filling orders for customers and supporting his young family. At the end of the week when he closed his doors, the last thing he felt like doing was the paperwork. What started as a month’s backlog of filing quickly turned to a year’s worth, and then two.
When Ben failed to lodge his activity statements he caught the attention of the ATO. Trudy, an ATO staff member, contacted Ben, offered him assistance and provided him with an extension to lodge his outstanding returns. Ben chose not to cooperate.
The ATO pursued legal action and it was only after Ben was issued with a court summons that he lodged the outstanding returns. During sentencing, the magistrate acknowledged that he had been non-compliant for some time and stated that, as taxpayers, we owe it to the community to lodge all our returns in a timely manner.
Ben was convicted and fined a total of $10,500 in relation to nine offences for failing to lodge GST returns.
Example 2: Poor record keeping does not reduce your obligations
When Barry started Hardwearing Home Renovations, his aim was to build his customer’s dream homes – not be stuck with paperwork. So one of his first priorities was finding an accountant. Barry got on with building, and once a quarter would collect all his receipts and drop them off to his accountant.
During the global financial crisis (GFC), Hardwearing Home Renovations’ business slowed as clients found it hard to pay up and potential clients turned their minds to saving. While Barry still had a few jobs up his sleeve, he did begin to worry about his financial affairs and how he would cope if it turned out he owed the ATO on his next BAS.
Weeks turned into months and Barry continued to fail to lodge his BAS. Unfortunately for Barry, the ATO had kept a close eye on BAS lodgment and soon he was contacted by the ATO. Barry just hoped the problem would go away and didn’t face up to it. Several months into the audit, Barry was informed that court action may soon commence and he finally decided to provide the paperwork to his accountant.
Upon receiving the court attendance notice, Barry’s accountant lodged his outstanding BAS for Hardwearing Home Renovations. After pleading guilty in the Magistrates Court of Western Australia, Barry was convicted and received a fine of $49 000. In sentencing the Magistrate noted that ‘although you entered an early plea of guilty and have since lodged all outstanding BAS, poor record keeping does not reduce your, or anyone else’s obligations.’
(Please note the business and personal names were changed to protect identity in both examples)
