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ATO Penalty & Interest Remission Request (Australia)
A failure-to-lodge penalty or a general interest charge from the Australian Taxation Office can be remitted — wiped in whole or in part — when the request engages the right test. Our Australian template asks the Commissioner of Taxation to remit a failure-to-lodge (FTL) penalty, general interest charge (GIC) or shortfall interest charge (SIC) under sections 298-20 and 8AAG of the Taxation Administration Act 1953 (Cth), building a fair-and-reasonable case from your circumstances, compliance history, financial hardship and — where a registered agent was at fault — the safe harbour.
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Request for Remission of Penalty and Interest
Failure To Lodge On Time (FTL) Penalty — Remission Request To The Commissioner Of Taxation · 9 June 2026
Priya N. Sandhu
8 Rosella Avenue, Glenelg SA 5045
0438 217 905
priya.sandhu@email.com.au
9 June 2026
The Commissioner of Taxation
Australian Taxation Office
GPO Box 9990
Adelaide SA 5001
GPO Box 9990
Adelaide SA 5001
REQUEST FOR REMISSION OF PENALTY AND INTEREST
Failure to lodge on time (FTL) penalty · TFN/ABN: ABN 51 824 753 556
Dear Commissioner,
I ask the Commissioner to grant full remission of the Failure to lodge on time (FTL) penalty of approximately 1,650.00 AUD charged to my account in relation to Business activity statements for the quarters ending September 2025 and December 2025. I make this request having regard to the circumstances, my compliance history and the matters set out below, and I ask that recovery of the charge be held while the request is considered.
I ask the Commissioner to grant full remission of the Failure to lodge on time (FTL) penalty of approximately 1,650.00 AUD charged to my account in relation to Business activity statements for the quarters ending September 2025 and December 2025. I make this request having regard to the circumstances, my compliance history and the matters set out below, and I ask that recovery of the charge be held while the request is considered.
1.
APPLICANT DETAILS
Name: Priya N. Sandhu
TFN / ABN: ABN 51 824 753 556
Address: 8 Rosella Avenue, Glenelg SA 5045
Telephone: 0438 217 905
Email: priya.sandhu@email.com.au
TFN / ABN: ABN 51 824 753 556
Address: 8 Rosella Avenue, Glenelg SA 5045
Telephone: 0438 217 905
Email: priya.sandhu@email.com.au
2.
THE PENALTY OR INTEREST IN QUESTION
Type of charge: Failure to lodge on time (FTL) penalty
Amount: 1,650.00 AUD
Period / lodgment the charge relates to: Business activity statements for the quarters ending September 2025 and December 2025
Date of the notice or statement: 26 May 2026
Amount: 1,650.00 AUD
Period / lodgment the charge relates to: Business activity statements for the quarters ending September 2025 and December 2025
Date of the notice or statement: 26 May 2026
3.
REMISSION SOUGHT
I ask the Commissioner to grant full remission of the charge. I understand the Commissioner must consider remission on the particular facts of my case, and I ask for a written decision with reasons so that I can understand the outcome and any further options.
4.
REASON FOR THIS REQUEST
I was hospitalised for emergency surgery and a long recovery over the relevant quarters, which prevented me lodging on time. I have a clean lodgment history, the statements are now lodged, and the FTL penalty should be remitted in full.
5.
GROUNDS FOR REMISSION — CIRCUMSTANCES
The failure-to-lodge-on-time penalty is imposed under Division 286 of Schedule 1 to the Taxation Administration Act 1953 (Cth) at one penalty unit (currently $330) for each 28 days (or part) the document is overdue, to a maximum of 5 units, with the base multiplied by 2 for a medium entity and by 5 for a large entity. The Commissioner has a discretion under section 298-20 to remit the penalty in whole or in part, and the Commissioner's practice (PS LA 2011/19) is to remit where it is fair and reasonable in the circumstances. I ask that the discretion be exercised here for the reasons set out below.
The delay or shortfall was caused by serious illness or injury. These circumstances were genuine and, so far as they were within my control, I acted reasonably to limit their effect and to bring my obligations up to date as soon as I was able.
What happened and when: On 2 September 2025 I was admitted for emergency abdominal surgery and was in hospital for 11 days, followed by 8 weeks of restricted activity on medical advice. My small business has no other staff, so no one else could prepare the BAS during that period. I lodged both outstanding statements on 14 May 2026, within days of being cleared to return to full work.
Steps I took to put things right: As soon as I was able I engaged a registered BAS agent, brought both quarters up to date, and set up quarterly reminders and a direct debit so future statements lodge on time.
The delay or shortfall was caused by serious illness or injury. These circumstances were genuine and, so far as they were within my control, I acted reasonably to limit their effect and to bring my obligations up to date as soon as I was able.
What happened and when: On 2 September 2025 I was admitted for emergency abdominal surgery and was in hospital for 11 days, followed by 8 weeks of restricted activity on medical advice. My small business has no other staff, so no one else could prepare the BAS during that period. I lodged both outstanding statements on 14 May 2026, within days of being cleared to return to full work.
Steps I took to put things right: As soon as I was able I engaged a registered BAS agent, brought both quarters up to date, and set up quarterly reminders and a direct debit so future statements lodge on time.
6.
COMPLIANCE HISTORY AND CORRECTIVE ACTION
Compliance history: In the 6 years I have run this business I have never lodged a BAS or income tax return late before these two quarters. My account has otherwise been fully compliant.
Corrective action taken: Both BAS for the September and December 2025 quarters were lodged on 14 May 2026, and the net amounts have been paid in full.
All outstanding lodgments and obligations are now up to date, and I have put arrangements in place to make sure I remain compliant going forward.
Corrective action taken: Both BAS for the September and December 2025 quarters were lodged on 14 May 2026, and the net amounts have been paid in full.
All outstanding lodgments and obligations are now up to date, and I have put arrangements in place to make sure I remain compliant going forward.
7.
FINANCIAL HARDSHIP
Income position: Sole-trader net income of about 1,100 AUD per week, with no other household income.
Essential commitments: Rent of 520 AUD per week plus ongoing post-surgery medical costs of about 180 AUD per week.
Impact of the charge: The medical event reduced my trading income for several months while fixed costs continued, so an FTL penalty on top of that pressure is a real hardship.
Because the general interest charge and shortfall interest charge incurred on or after 1 July 2025 are no longer tax-deductible, the charge is a direct, unrecoverable cost, and its remission is material to my financial position.
Essential commitments: Rent of 520 AUD per week plus ongoing post-surgery medical costs of about 180 AUD per week.
Impact of the charge: The medical event reduced my trading income for several months while fixed costs continued, so an FTL penalty on top of that pressure is a real hardship.
Because the general interest charge and shortfall interest charge incurred on or after 1 July 2025 are no longer tax-deductible, the charge is a direct, unrecoverable cost, and its remission is material to my financial position.
8.
SAFE HARBOUR — REGISTERED AGENT
I engaged a registered agent in relation to this obligation. Where a taxpayer engages a registered tax or BAS agent, provides all relevant information in time, and the failure did not result from the agent's intentional disregard of, or recklessness as to, a taxation law, the safe harbour in Schedule 1 to the Taxation Administration Act 1953 (Cth) applies and the taxpayer is not liable to the penalty (section 284-75(6) provides the equivalent protection for statement-based shortfall penalties). I ask the Commissioner to treat this charge as falling within the safe harbour, and in the alternative to remit it.
Detail: I engaged my registered BAS agent only after my recovery, so the safe harbour is raised in the alternative to the circumstances above rather than as the primary ground.
Detail: I engaged my registered BAS agent only after my recovery, so the safe harbour is raised in the alternative to the circumstances above rather than as the primary ground.
9.
ACKNOWLEDGEMENT AND DECISION
Please acknowledge receipt of this request in writing, hold recovery of the charge while it is considered, and provide a written decision with reasons. If remission is refused in whole or in part, I ask to be told my review options, including objection where the decision is reviewable and complaint to the Inspector-General of Taxation and Taxation Ombudsman. I look forward to your response.
YOURS FAITHFULLY,
Priya N. Sandhu
Applicant
Date: ____________________
APPLICANT
Priya N. Sandhu
Date: ____________________
Available as a print-ready PDF or an editable Microsoft Word (.docx) file.
What Is an ATO Penalty & Interest Remission Request?
Remission is the Commissioner of Taxation's power to reduce or cancel a penalty or interest charge. For administrative penalties — including the <strong>failure-to-lodge-on-time penalty</strong> under Division 286 of Schedule 1 to the <strong>Taxation Administration Act 1953 (Cth)</strong> — the discretion sits in <strong>section 298-20</strong>, and the ATO's practice is to remit where it is fair and reasonable. For the <strong>general interest charge</strong>, the power is in <strong>section 8AAG</strong>, with three grounds: the delay was outside your control and you mitigated it; it was within your control but fair and reasonable to remit; or there are special circumstances.
The numbers matter more than they used to. The failure-to-lodge penalty is one penalty unit (currently $330) for each 28 days a document is overdue, to a maximum of 5 units, doubled for medium entities and multiplied by five for large entities. The general interest charge runs at <strong>10.96% a year</strong> for the April–June 2026 quarter. Critically, GIC and SIC incurred on or after <strong>1 July 2025 are no longer tax-deductible</strong> — so every dollar of interest the ATO remits is a dollar saved outright, with no offsetting deduction to soften it.
A remission request succeeds when it does three things: names the cause (illness, a natural disaster, a system failure, a family emergency) and shows you acted reasonably; sets out a clean compliance history and the corrective action you have taken; and, where a registered tax or BAS agent was responsible, raises the safe harbour. Where you gave the agent everything they needed in time and the failure was the agent's, the safe harbour can mean you were never liable to the penalty at all.
What's Covered in This Template
The letter is built the way the ATO assesses remission — cause, compliance history, hardship and the agent safe harbour — and adapts to the charge you are asking to be remitted.
Charge-Aware Framework
Choose FTL penalty, GIC, SIC or another administrative penalty — the Expert grounds clause writes the matching statutory test (Division 286 and s 298-20, or the three s 8AAG grounds) into the letter.
Circumstances & Timeline
A dated account of what happened — illness, disaster, system failure, family emergency — and the reasonable steps you took to put things right.
Compliance History
States a clean lodgment and payment record, confirms everything is now up to date, and shows what you have changed — the single biggest factor in a remission decision.
Financial Hardship
Sets out income against essential commitments so the file shows the burden in numbers, and notes the interest is now a non-deductible cost.
Agent Safe Harbour
Where a registered agent was at fault and you supplied everything in time, raises the safe harbour — a complete answer to the penalty, not just a discretion to remit.
Full or Partial Remission
Asks for the whole charge to be waived, or part of it, with a clear statement of what you are seeking.
GIC Deductibility Change Built In
The letter reflects the 1 July 2025 change that makes GIC and SIC non-deductible, so the value of remission is stated plainly.
Single-Signer Letter Format
Letterhead, the Commissioner of Taxation as recipient, subject line and a single applicant signature block — ready to lodge online or post.
How to Create an ATO Remission Request
Five steps from a penalty notice to a lodged remission request.
- 1
Identify the Charge
Find the penalty or interest notice and note the type — FTL penalty, GIC or SIC — the amount, the period it relates to and the notice date.
- 2
Say What You Want
Choose full or partial remission and add two or three sentences on why the charge should be remitted. The detail comes next.
- 3
Build the Grounds (Expert)
Name the cause and set out a dated timeline, then the template writes the matching statutory framework for the charge you chose.
- 4
Add History, Hardship and Safe Harbour (Expert)
State your compliance record, confirm you are up to date, set out any hardship, and raise the agent safe harbour if a registered agent was responsible.
- 5
Lodge and Keep the Record
Lodge through your registered agent, Online services or by post, ask the ATO to hold recovery while it is considered, and keep a dated copy.
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Legal Considerations
Remission is discretionary, so the request has to engage the right statutory test for the charge.
This template provides general information for Australian taxpayers and is not tax or legal advice. For large penalties, shortfall penalties involving questions of reasonable care, or disputes about whether a penalty was correctly imposed, get advice from a registered tax agent or tax lawyer. Complaints about ATO conduct can go to the Inspector-General of Taxation and Taxation Ombudsman.
Reviewed for Australian tax law
The Failure-to-Lodge Penalty (Division 286)
The FTL penalty under <strong>Division 286 of Schedule 1 to the Taxation Administration Act 1953 (Cth)</strong> is one penalty unit (currently $330) for each 28 days (or part) a document is overdue, to a maximum of 5 units. The base is multiplied by 2 for a medium entity and by 5 for a large entity, so it climbs quickly. The Commissioner of Taxation can remit it under s 298-20, and the ATO's practice (PS LA 2011/19) is to remit where it is fair and reasonable.
Remission of Interest (s 8AAG)
The general interest charge can be remitted under <strong>section 8AAG of the Taxation Administration Act 1953 (Cth)</strong> on three grounds: where the delay was not caused by you and you took reasonable steps to mitigate it; where it was caused by you but it is fair and reasonable to remit; or where there are special circumstances. The shortfall interest charge, which applies on amended assessments, can likewise be remitted where fair and reasonable.
Interest Is No Longer Deductible
For charges incurred on or after <strong>1 July 2025</strong>, GIC and SIC are no longer deductible for income tax (Treasury Laws Amendment (Tax Incentives and Integrity) Act 2025 (Cth)). With the GIC rate at 10.96% a year for the April–June 2026 quarter, the charge is now a straight, unrecoverable cost — which is why a remission request is worth making and worth getting right.
The Agent Safe Harbour (s 284-75(6))
Where you engaged a registered tax or BAS agent, gave them all relevant information in time, and the failure did not result from the agent's intentional disregard or recklessness, the <strong>safe harbour</strong> in Schedule 1 to the Taxation Administration Act 1953 (Cth) means you are not liable to the penalty — a complete answer, not merely a discretion to remit. You carry the burden of proving you supplied everything on time, which is why the template records it clearly.
How This Fits the Other ATO Templates
A remission request manages penalties and interest; it does not dispute the underlying tax. If you also disagree with the assessment, lodge an objection — our ATO income tax objection or ATO GST / BAS objection template. To arrange the debt itself, use our ATO payment plan request, which also asks for interest remission for the plan period. For Centrelink debts rather than tax debts, see our Centrelink debt dispute letter.
Frequently Asked Questions
Ask for Remission — On the Right Grounds, With the Right Evidence
Create your ATO penalty and interest remission request in minutes: a charge-aware fair-and-reasonable case, compliance history, hardship and the agent safe harbour, in formal Australian letter format. Download the PDF free, or unlock Expert for the full grounds and safe-harbour sections.
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