This is a case study on failure to lodge tax returns and failure to lodge BAS statements by a company in the hospitality industry resulting in a financial penalty.
What is alleged to have occurred?
Our client is a business that was accused of having contravened section 8C of the Taxation Administration Act 1953 by failing to lodge tax returns and the required BAS statement for a five-year period. The company had failed to comply with the directions given by the Commissioner for Taxation for the provision of the records. This resulted in over 55 charges being laid.
What happened at Court?
After having negotiated the charges in the most favourable way possible, we worked with the client to properly understand the reason for their non-compliance. It transpired that they had fallen on difficult times.
Initially, the business operated in accordance with its obligations, but issues arose when one of the business partners unexpectedly left the business. This left the remaining partner having to absorb their role and responsibilities.
After a short period of time, they found themselves falling behind on their paperwork. Our client was working 7 days a week to try and remain afloat. All their resources were put into the daily operations of the business and there was no time allocated to tax compliance. The more behind they fell, the more difficult it was to face.
Through the persuasive submissions of the advocate, the Court was able to understand the immense pressure the business owner was under. We had supported them in making arrangements to lodge the outstanding documents following the Court hearing. We knew that having a clear plan would demonstrate a degree of remorse.
Importantly, while the Court can appreciate that issues arise resulting in non-compliance, there needs to be steps taken to rectify the situation. While it would have been even more persuasive if they had been in a position to rectify all outstanding BAS and returns ahead of Court, it was nonetheless of benefit that the clear plan had been put in place. Evidence in support of the explanation offered to the Court was gathered and tendered on their behalf.
What was the result?
On the charges of failure to lodge tax returns, the company was convicted and fined a sum of $2000.
On the charges of failing to lodge BAS statements, the company was fined approximately $3500.
A period of 90 days was given to file all outstanding documents.
This was an excellent result in the face if significant non-compliance.
DISCLAIMER: This is a real case study of an actual case from our files. Details pertaining to the client have been changed to protect their privacy. The sentence imposed and the charge have not been altered. These case studies are published to demonstrate real outcomes and give an indication of possible tariffs in Court. We do not guarantee a similar case on these charges will get the same result. Please note that we post results at our discretion, therefore while many case studies are average results, others are notable for their exceptional outcomes. PUBLISHED 01/11/2024
