Terrible Accountants now ATO has sent notice for potential audit and prosecution

Hi everyone,

Not sure if this is the right place to ask this but as I’m sure you can imagine I’m looking for any help I can get as I’m desperate.

I started a company with my partner in April 2023. I had an accountant who always told us “oh it’s fine I will fix it for you” “oh you don’t need to pay the PAYG I have already made it $0 for you”. He recently sold his accounting firm to two people who now are our accountants and have taken over our case. We have been so stressed as we have literally not even had ONE BAS statement in the nearly 2 years we have had this company.

I received a letter in the mail on the 9/1/25 from the ATO saying we now face prosecution and an audit due to the fact we have never submitted an activity statement. We asked our accountants SO many times and made it clear we are incredibly worried that we have never submitted anything or paid PAYG since our first tax return in 22/23 financial year. They told us they would sort it out and not to worry but they were concerned that the previous accountant had done nothing. I personally have no idea how to submit an activity statement or what I’d even do for it hence why I have an accountant in the first place.

Am I seriously potentially going to jail and copping and $82500 fine for my accountants letting me down despite my best efforts to try and get it sorted?????

Edit: I have commented this a few times but thought I’d just add it in for the new people reading so you can get a better understanding rather than assuming I deserve jail time for being naive

Just wanted to share this so you get a bit more of my story which I perhaps should have shared. Of course I felt something was off for a long time but this accountant was our accoutant for a family member for many years so we thought we could trust them. We also are young and have no idea about running a business. We have paid tax though and I think you should read the below for more insight

We paid a huge tax bill 22/23 financial year ($850k+) and the next one hasn’t been fully prepared yet and isn’t due until April I believe (that’s what my accountant said anyway). I have also paid 1x PAYG instalment of $130k in about April 2023. My accountant started making my personal PAYG ‘0’ after I paid $130k in April as we decided we definitely weren’t going to be earning the same personal tax in the 23/24 financial year as we will now be able to do the company tax. This is also why I haven’t paid PAYG for the company yet as like I said, the first time paying company tax will be 23/24 financial year and then PAYG will be based on that tax. I believe we are up to date on our tax apart from the last financial year which I already prepared myself for and isn’t ready yet. So just to be clear, I have never and have never needed to pay company tax until 23/24 financial year as there was no company income in 22/23 financial year.

Ultimately I think what has gone wrong is that the company wasn’t set up and had money incoming until December 2023 but the ACN and ABN was registered in April 2023. No money came through the company until dec 2023 so we had no activity statements to provide initially until December. Then after December my accountant never did anything and I honestly never even knew what I had to do. So we paid personal tax at 47% in 22/23 financial year and this previous financial year 23/24 will be our first year paying company tax now that money as gone through it that year. I definitely don’t believe I am in debt at all to the ATO and I definitely haven’t pocketed all the money having paid nearly $1M in tax in the last 1.5 years. I believe that I just need to show no money was coming in for that period by uploading a BAS and then get my accountants to do the BAS for the last 12 months.

This is my first time earning big money and I’m only 23 (I was 21 when I first started earning it) I am very new and naive to this. Probably should have got a better accountant but I didn’t know I was doing anything wrong until today 😅🥲