Increased Penalty Units: Implications for Taxpayers

Increased Penalty Units: Implications for Taxpayers


Under tax laws, the ATO can impose administrative penalties if you fail to meet your tax obligations.

From 1 July 2023, the base penalty unit has increased by almost 14% to $313. 

When the ATO imposes penalties, they can calculate the penalty using either:

  • a statutory formula, based on the taxpayers behaviour and the amount of tax avoided; or
  • multiples of the base penalty unit.
Examples of Tax Penalties

These are some of the examples of penalties that the ATO may impose:

  • Failing to retaining records as required (maximum 20 penalty units = $6,260)
  • Failing to register (or cancel) GST registration when required (maximum 20 penalty units = $6,260)
  • Failure to lodge a return or statement for a small entity (1 penalty unit for each 28 days late, up to 5 penalty units = $313 to $1,565)

Superannuation funds

The increase in penalty units can impact significantly on superannuation funds.  For superannuation funds, the penalty units are imposed per trustee.  Where a fund has a corporate trustee, the penalty will be imposed solely on the corporate trustee.  However, where a fund has individual trustees, the penalty will be imposed on each trustee.  Effectively doubling the penalty where the fund has two individual trustees.

This is another reason that we recommend that a superannuation fund should have a corporate trustee.

It is possible to change the trustee of your superfund to a corporate trustee.  Please contact us if you would like to discuss this further.

DISCLAIMER: The information in this article is general in nature and is not a substitute for professional advice. Accordingly, neither TJN Accountants nor any member or employee of TJN Accountants accepts any responsibility for any loss, however caused, as a result of reliance on this general information. We recommend that our formal advice be sought before acting in any of the areas. The article is issued as a helpful guide to clients and for their private information. Therefore it should be regarded as confidential and not be made available to any person without our consent.