The Institute of Public Accountants has thrown its support behind a recent proposal dealing with small business penalties, suggesting the previous regime was too “heavy-handed” in parts.
ATO proposal gains momentum
As reported earlier this month, the ATO is proposing that for certain small businesses and individual clients, it will provide 'one chance' before applying penalties for false or misleading statements due to failure to take reasonable care in income tax returns and activity statements.
"The 'one chance rule' proposal is a clear sign that the ATO recognises that in the past, it may have been too heavy-handed on taxpayers trying to do the right thing, by not taking into account individual circumstances" said IPA chief executive officer Andrew Conway.
"The reality is that the ATO remits a substantial number of penalties down the track after they are disputed, which normally involves a great deal of time, effort and stress,” Mr Conway said.
"Not levying the penalty in the first instance will result in a reduction in the administrative burden facing individuals and small business,” he added.