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Safe Harbour

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Taxpayers utilising the services of a registered tax agent have the benefit of ‘safe harbour’ (or exemption) from penalties even if:

  • Their tax return is later discovered to have contained an error; or
  • Their tax return is lodged late.

When did the new safe harbour provisions commence?

The ‘safe harbour’ can only apply for returns lodged on or after 1 March 2010.

How does the new safe harbour work?

The key to benefitting from the ‘safe harbour’ should the need arise, is for you to ensure that you provide us with all of the relevant tax information in your possession. This includes any records, or documents we request from you plus any other information you think may be relevant to the preparation of your tax return. The information provided must be complete and accurate.

It is your responsibility to provide all relevant tax information to us with sufficient time to lodge the return by its due date. The safe harbour from late lodgement penalties can also apply where a BAS, IAS, or FBT return is lodged late.

What does the new safe harbour apply to?

Whilst the safe harbour can apply to exempt the penalty for an error made in a tax return, it is important to note that the tax and interest will be still be payable.

What if the safe harbour does not apply?

Even if you are not eligible for the safe harbour, it is still possible to request the ATO to remit or reduce the penalty and for that decision to be reviewed by the administrative Appeals Tribunal if you are unsuccessful.

For more information on Safe Harbour, please speak with your Hanrick Curran Adviser or visit the ATO website