What Happens if You Don’t Lodge Your Tax Return in Australia?

If you fail to pay your tax or lodge your tax return on time, it can make things worse. Yes, a huge tax debt can accumulate interest from the day the original returns were due, or you may end up with the criminal conviction for not lodging on time. If you want to avoid tax debt, you have to stay on top of and pay your taxes. However, if you are involved in tax debt, you should start paying it off. If you fail to do either of these and stuck with a tax debt that you are not paying off, you will face some potential consequences.

What can happen if you don’t pay your tax debt at all?

  • The ATO will collect the debt amount through a third – party collection agency.
  • You will be frequently contacted after the due date through SMS, letters, and phone call.
  • Finally, if you don’t respond, severe action may be taken for not being cooperative with the ATO.

If you can’t pay the tax on time, at least maintain healthy communication with the ATO to avoid getting into trouble. Even if you can’t manage to pay the debt within the time, it is advisable to lodge your activity statements and tax returns on time. If you are somewhere struggling with the tax debts, get help from the Tax Lawyer Perth. Check out tax relief new york city ny for more information.

What kind of action will be taken?

Garnishee notices

The ATO will issue a garnishee notice to a person or business that holds money for you so that the concern person or organisation has to pay the money to reduce your debt. You will receive the copy of the notice as well. If you are an individual, the garnishee notice will be sent to your employer, banks, financial institution, etc. For businesses, the notice will be issued to the financial institution, trade debtors, and suppliers.

Director Penalty notice

The ATO may issue a penalty notice to start the legal proceedings to recover the debt amount you owe to them.  If you are issued with a director penalty notice, contact your tax litigation attorney Perth as early as possible.

Direction to pay super guarantee charge (SGC)

If you are an employer, you will be issued with a direction to pay SGC within a certain time. When you receive this notice, you must ensure to pay the full amount included in the direction. Neglecting the direction to pay can lead to serious issues including criminal offence and court-enforced penalties.


If you fail to pay the debt you owe, the ATO may file claims with the court. Once the court recognises that you owe the debts, they may execute the judgement debts in several ways including serving a bankruptcy notice. If you have committed an act of bankruptcy, you will become bankrupt, and a trustee will be appointed to manage your properties. This involves selling your estate to settle your debts.

You better work with the Tax Lawyer Perth to avoid such issues. The attorney will guide you on the right path and save you from these troubles. Whether you are looking for a tax litigation attorney or migration lawyer in Perth, contact Monro Doig Lawyers, a leading boutique law firm in Perth. They are specialised in tax, superannuation, and commercial and migration law.