Penalties for Repeated Failure to Keep Good Records

Last updated June 2011

Businesses who keep poor records can face penalties. Penalties can be imposed for poor record keeping in recognition of the fact that without proper records, there can be no guarantee that people are meeting their tax responsibilities.

Generally, people will be given an opportunity to improve their record keeping before penalties are considered. If people do not take this opportunity then penalties of up to $2,200 may apply.

The Taxation Office has stated “We will not penalise those who make honest mistakes or those who have made a genuine attempt to improve their records...” and "...people won’t be penalised if it’s clear that the correct amount of tax has been paid despite the poor records. Our emphasis is on helping people to both keep good records and to meet their tax obligations. We offer a range of assistance to help businesses do their tax, including free electronic record-keeping software.”

The Tax Office has developed a penalties and record-keeping practice statement in consultation with business people.

Click Here to access the record-keeping practice statement that is available on the ATO's website. A fact sheet is also available on Penalties for not keeping proper records.

The message from the Taxation Office should not be considered to be targeted solely at business operators who keep their own records. It equally applies to those who engage bookkeepers. So the moral of the story is to ensure that you are getting good quality service from whoever is doing your work.

But the fear of penalties should not be the only factor influencing your decision to keep good records. Good records are an important tool for any business, as it assists in guiding your business to be as profitable as it can be.

Here at Patison Partners we have an affiliation with a bookkeeping firm "IT Figures" who subscribe to our ethic of performing work to the highest standard possible.