Highlights

  • The NSW Supreme Court found a Sydney barrister in civil contempt for withholding BAS and tax returns for five months.
  • The barrister had not lodged BAS or tax returns since September 2016, and his penalty has been stood over.
  • Self-preparers must lodge 2025-26 returns by Monday 2 November 2026, with payment generally due on 21 November.
  • About $21 billion of contractor payments now pre-fill for roughly 700,000 sole traders at Tax Time 2026.

"Leaving income out of your tax return doesn't make it invisible to the ATO," Assistant Commissioner Tony Goding says, and a Sydney courtroom has just shown another side of that message. A barrister has been found in civil contempt after failing for about five months to hand over nearly a decade of business activity statements and tax returns in a fee dispute. The finding lands days before the 2 November deadline for self-prepared returns, as the ATO sharpens its focus on omitted income.

What the court found

In Australian Continuing Legal Education Centre Pty Ltd v Philip Bates [2026] NSWSC 1266, Justice Hammerschlag found barrister Philip Bates in civil contempt. The proceedings concern a dispute over more than $112,000 in floor fees involving Sir Anthony Mason Chambers, the charges barristers pay for chambers accommodation and services.

Mr Bates was required to produce his BAS and tax returns for 2014 to 2023 and failed to do so for about five months. The court described his submissions as "factually inaccurate, without merit and disingenuous". The penalty has been stood over to a later date.

This is a contempt ruling in civil proceedings, not a tax prosecution, and nothing reported points to ATO action against him.

Why tax documents mattered

Returns and BAS record income, turnover and expenses lodged with the ATO, so in a fee dispute they can help test claims about what a practitioner earned and could afford to pay. Mr Bates had not lodged either since September 2016, so much of the period covered by the order fell within years with nothing lodged.

The finding is separate from whether any tax was owed.

The lodgment obligations behind the case

Self-employed professionals such as barristers generally operate as sole traders and report business income in their individual return. GST registration is compulsory once annual GST turnover reaches $75,000, and BAS must then be lodged. Fees of $110,000 including GST contain $10,000 of GST, which goes to the ATO less any credits.

Where returns are missing, the ATO can issue default assessments based on information it holds, impose failure-to-lodge penalties of up to $1,820 for individuals, and in some cases prosecute. It is also leaning on third-party data. About $21 billion of contractor payments reported through the Taxable Payments Annual Report pre-fills for roughly 700,000 sole traders at Tax Time 2026.

A worked example: a year of unlodged income

Hypothetical example: Alex, an Australian resident, has $150,000 of taxable income in 2026-27. Resident rates give nil on the first $18,200, then $4,020 on the next $26,800 at 15%, $27,000 on $90,000 at 30%, and $5,550 on $15,000 at 37%. That is $36,570 of income tax, and the 2% Medicare levy adds $3,000, for $39,570 before offsets or instalments.

If that year went unlodged, a default assessment could estimate income from ATO data, with penalties and the general interest charge, which compounds daily and is no longer deductible, on any shortfall. Several unlodged years multiply the figures.

Help for those behind

The ATO says people in hardship should contact it or a registered tax agent early, and that delaying lodgment does not move the payment due date. Those not required to lodge can submit a non-lodgment advice. Taxpayers with several overdue returns generally have more options if they come forward before the ATO contacts them.

Joining a registered tax agent's client list by 31 October may allow lodgment as late as May 2027, depending on eligibility. The ATO also warns about unregistered preparers: returns it held on that suspicion claimed $170 million in deductions, and their clients lose safe harbour protection.