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Old Nov 22nd 2017, 12:26 am   #1
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Default Totally stuffed up with the ATO

For reasons I can't recall (insanity, probably) I thought that when I left Australia, I wouldn't need to fill in any more tax returns. The only money I'd be getting was bank interest, I'd given my bank my overseas address, and the amount of the interest would be under the tax free threshold each year.

What a wally. The interest was subject to withholding tax as I was no longer a tax resident of Australia. The tax free threshold doesn't apply because I'm not an Oz tax resident. The bank didn't withhold the tax, I didn't keep on top of it by checking at the end of each financial year - so a few days ago I received an email from my.gov telling me to check my messages.

$1,800 penalty from the ATO for 3 years non-lodgement of tax returns, and a very strong warning to get my tax affairs up to date as interest is accruing daily on the penalty.

Have just got off the phone to my former Australian accountant - it took 2 hours to sort out. I owe about a grand in tax and I'll probably still have to pay the $1,800, although he's requesting remission of all or part of the penalty.

That'll teach me
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Old Nov 22nd 2017, 1:24 am   #2
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Default Re: Totally stuffed up with the ATO

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Originally Posted by spouse of scouse View Post
For reasons I can't recall (insanity, probably) I thought that when I left Australia, I wouldn't need to fill in any more tax returns. The only money I'd be getting was bank interest, I'd given my bank my overseas address, and the amount of the interest would be under the tax free threshold each year.

What a wally. The interest was subject to withholding tax as I was no longer a tax resident of Australia. The tax free threshold doesn't apply because I'm not an Oz tax resident. The bank didn't withhold the tax, I didn't keep on top of it by checking at the end of each financial year - so a few days ago I received an email from my.gov telling me to check my messages.

$1,800 penalty from the ATO for 3 years non-lodgement of tax returns, and a very strong warning to get my tax affairs up to date as interest is accruing daily on the penalty.

Have just got off the phone to my former Australian accountant - it took 2 hours to sort out. I owe about a grand in tax and I'll probably still have to pay the $1,800, although he's requesting remission of all or part of the penalty.

That'll teach me
Easy mistake to make.

Pay the tax you owe and leave it at that. $1800 for that type of error is an ATO rort.

Move the money to the UK to penalise the ATO for future tax they could have received but are now not going to receive for being dicks.
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Old Nov 22nd 2017, 6:26 pm   #3
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Default Re: Totally stuffed up with the ATO

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Easy mistake to make.

Pay the tax you owe and leave it at that. $1800 for that type of error is an ATO rort.

Move the money to the UK to penalise the ATO for future tax they could have received but are now not going to receive for being dicks.
Ta Beoz. Yes, I thought the penalty was a bit steep, hopefully they'll reduce or wipe it now that my returns are in.

I need to leave some money there, for birthday/Christmas etc gifts for family - the withholding tax is a pain but at least I get a little more interest there, it's virtually nil in the UK. My Aussie dollars have more buying power too
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Old Nov 22nd 2017, 10:32 pm   #4
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Default Re: Totally stuffed up with the ATO

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Originally Posted by spouse of scouse View Post
Ta Beoz. Yes, I thought the penalty was a bit steep, hopefully they'll reduce or wipe it now that my returns are in.

I need to leave some money there, for birthday/Christmas etc gifts for family - the withholding tax is a pain but at least I get a little more interest there, it's virtually nil in the UK. My Aussie dollars have more buying power too

Hang on, doesn't the bank bear some responsibility here? They should have been deducting the withholding tax, but haven't done so - Surely you can argue with the ATO that this is the bank's stuff up, and not yours?


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Old Nov 22nd 2017, 11:41 pm   #5
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Default Re: Totally stuffed up with the ATO

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Originally Posted by Swerv-o View Post
Hang on, doesn't the bank bear some responsibility here? They should have been deducting the withholding tax, but haven't done so - Surely you can argue with the ATO that this is the bank's stuff up, and not yours?


S
Yes the bank should have withheld the tax Swerv-o, they said as much when I called them. But it's my fault too, for not checking. The tax the accountant's worked out I owe is actually less than the 10% withholding tax would have been, no idea how that worked out but I'm not complaining!
You make a good point though, it might help with persuading the ATO to drop or lessen the penalty. I live in hope
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Old Nov 29th 2017, 9:02 am   #6
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Default Re: Totally stuffed up with the ATO

Got my notices of assessment today - the accountant must have transposed a couple of numbers, instead of owing $920 I owe $290. Feels like a win although I might look for another accountant!

Next job, sort out the $1,800 penalty.
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Old Nov 30th 2017, 11:47 am   #7
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Default Re: Totally stuffed up with the ATO

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Originally Posted by spouse of scouse View Post
Got my notices of assessment today - the accountant must have transposed a couple of numbers, instead of owing $920 I owe $290. Feels like a win although I might look for another accountant!

Next job, sort out the $1,800 penalty.
I know people that have gotten away without paying that non-lodgement penalty. I think it's discretionary, unfortunately, I'm not sure. Being overseas probably won't help your cause I'm guessing. .... mainly inasumuch as you can't ask people personally about the subject, The people to ask would be tradies I reckon and maybe small local business people.
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Old Dec 5th 2017, 11:49 am   #8
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Default Re: Totally stuffed up with the ATO

Lemme get this right, if the bank would have been collecting w/h tax properly then no lodgements would have been necessary and everything would have been ok?

Or are they mad because of the lack of w/h tax AND not lodging any returns?

Isn't there a form when you leave a country for good, informing them that you are no longer a tax resident? I know that you need to send one off to be taken off the electoral register or they'll start pestering you for non-voting...
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Old Dec 5th 2017, 1:01 pm   #9
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Default Re: Totally stuffed up with the ATO

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Originally Posted by ozzieeagle View Post
I know people that have gotten away without paying that non-lodgement penalty. I think it's discretionary, unfortunately, I'm not sure. Being overseas probably won't help your cause I'm guessing. .... mainly inasumuch as you can't ask people personally about the subject, The people to ask would be tradies I reckon and maybe small local business people.
Thanks Ozzie - someone at the last place I worked had a penalty for non-lodgement waived, but the ATO owed her money rather than the other way around so that may have had something to do with it. The accountant's put a request in so I'll have to wait and see.
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Old Dec 5th 2017, 1:07 pm   #10
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Default Re: Totally stuffed up with the ATO

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Lemme get this right, if the bank would have been collecting w/h tax properly then no lodgements would have been necessary and everything would have been ok?

Or are they mad because of the lack of w/h tax AND not lodging any returns?

Isn't there a form when you leave a country for good, informing them that you are no longer a tax resident? I know that you need to send one off to be taken off the electoral register or they'll start pestering you for non-voting...
They're mad at me for both! You need to complete a return even if the bank's withheld the tax.

There is a form for when you believe you won't have to lodge any returns in the future. But apparently you have to actually complete and lodge the form

I did tick the 'leaving Australia permanently' box when I moved to the UK, but that didn't help. I'm not on the electoral roll as I was hiding out from someone, quite legally I can assure you
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Old Dec 5th 2017, 11:59 pm   #11
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Default Re: Totally stuffed up with the ATO

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They're mad at me for both! You need to complete a return even if the bank's withheld the tax.
Really? What if someone doesn't live in Oz but just opened an account there - surely the w/h takes care of matters and annual returns aren't expected from all foreign account holders? That would be a bureaucratic nightmare...

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There is a form for when you believe you won't have to lodge any returns in the future. But apparently you have to actually complete and lodge the form
Yeah, I've heard of a similar one from the UK where you need to inform them that you are departing permanently. I believe the one in the UK actually makes you certify that you are leaving for a REAL JOB, so that you cannot just cut yourself loose by going on a permanent vacation...

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I did tick the 'leaving Australia permanently' box when I moved to the UK, but that didn't help. I'm not on the electoral roll as I was hiding out from someone, quite legally I can assure you
Polly mentioned a while back I believe that the landing/departure cards are simply collecting general/statistical data from passengers. As for the electoral roll I got shafted by not receiving any letters concerning a fine for not voting... even though I was overseas at the time. The fine was posted, but the family thought they shouldn't interfere with my personal correspondence.
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Old Dec 6th 2017, 12:20 am   #12
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Default Re: Totally stuffed up with the ATO

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Really? What if someone doesn't live in Oz but just opened an account there - surely the w/h takes care of matters and annual returns aren't expected from all foreign account holders? That would be a bureaucratic nightmare...

Yeah, I've heard of a similar one from the UK where you need to inform them that you are departing permanently. I believe the one in the UK actually makes you certify that you are leaving for a REAL JOB, so that you cannot just cut yourself loose by going on a permanent vacation...

Polly mentioned a while back I believe that the landing/departure cards are simply collecting general/statistical data from passengers. As for the electoral roll I got shafted by not receiving any letters concerning a fine for not voting... even though I was overseas at the time. The fine was posted, but the family thought they shouldn't interfere with my personal correspondence.
oops, sorry - you're right. If a foreign resident for tax purposes only Oz income is interest, dividends or royalties, and the correct percentage of non-resident tax has been withheld, then they don't need to complete an annual return. That exception's not reflected in the ATO calculator 'do I need to lodge a tax return' so it's a bit confusing. For me, anyway!

I'll have to be careful if I return to live in Oz and have to fill in one of those UK 'departing permanently' cards, I don't even have a job let alone a real one

Families, hey? The only time you want them to be nosy, they let you down Did you have to pay the fine or did they let it go?
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Old Dec 6th 2017, 12:24 am   #13
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Default Re: Totally stuffed up with the ATO

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The only time you want them to be nosy, they let you down Did you have to pay the fine or did they let it go?
Yeah, by the time I got the letter it appeared it was actually a follow-up and not the initial fine, and even that was already overdue! So I just decided to pay it and get it over with.

Now I'm worried about the recent QLD elections as I'm surely registered there but forgot to de-register when leaving. Not sure what to do about that now...
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Old Dec 6th 2017, 3:26 am   #14
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Default Re: Totally stuffed up with the ATO

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Originally Posted by spouse of scouse View Post
For reasons I can't recall (insanity, probably) I thought that when I left Australia, I wouldn't need to fill in any more tax returns. The only money I'd be getting was bank interest, I'd given my bank my overseas address, and the amount of the interest would be under the tax free threshold each year.

What a wally. The interest was subject to withholding tax as I was no longer a tax resident of Australia. The tax free threshold doesn't apply because I'm not an Oz tax resident. The bank didn't withhold the tax, I didn't keep on top of it by checking at the end of each financial year - so a few days ago I received an email from my.gov telling me to check my messages.

$1,800 penalty from the ATO for 3 years non-lodgement of tax returns, and a very strong warning to get my tax affairs up to date as interest is accruing daily on the penalty.

Have just got off the phone to my former Australian accountant - it took 2 hours to sort out. I owe about a grand in tax and I'll probably still have to pay the $1,800, although he's requesting remission of all or part of the penalty.

That'll teach me
Let me know if you need details of a good accountant in Perth, Sos
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Old Dec 6th 2017, 11:12 am   #15
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Default Re: Totally stuffed up with the ATO

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Let me know if you need details of a good accountant in Perth, Sos
What a lovely offer, will do and thanks
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