The Australian Government has recently announced a noteworthy initiative tailored for small businesses—the Small Business Lodgement Penalty Amnesty Programme. This programme offers a unique opportunity for eligible businesses to become compliant with their taxation obligations without incurring penalties. To make the most out of this opportunity and ensure a seamless compliance process, consider consulting a tax advisor.
Overview of the Amnesty Programme
As part of the 2023-24 Federal Budget, the government has rolled out this amnesty programme to encourage small businesses to re-engage with the taxation system. The amnesty is applicable to overdue income tax returns, business activity statements, and fringe benefits tax returns that were due between 1 December 2019 and 28 February 2022. Businesses lodging these overdue forms between 1 June 2023 and 31 December 2023 will have any failure-to-lodge penalties automatically remitted.
Eligibility Criteria
To be eligible for this amnesty, a small business must have had an annual turnover of less than $10 million at the time the original lodgement was due. Importantly, this amnesty does not extend to privately-owned groups or individuals controlling over $5 million in net wealth.
Why This Matters for Australian Small Businesses
The financial repercussions of late tax form lodgement can be significant, often resulting in a penalty of up to $1,100. This amnesty provides a reprieve and allows businesses to shift their focus on operational improvements and growth.
Addressing Outstanding Tax Debts and Repayment Options
While the amnesty covers the penalties associated with late lodgement, it’s crucial to address any outstanding tax debts. The Australian Taxation Office (ATO) offers various repayment options tailored to different business needs:
- Self-Service Payment Plan: Available for tax debts under $100,000, this option has a standard 28-day processing time. The proposed plan should enable the debt to be paid off in two years or less.
- Customised Payment Plans: These are offered on a case-by-case basis. The ATO considers factors such as compliance history, risk mitigation, and the size and age of debts when assessing eligibility.
We suggest you consult with your client manager for help with cashflow planning before committing to a payment plan.
How to Participate in the Amnesty Programme
To take advantage of this amnesty, eligible businesses should lodge the relevant overdue forms either independently or through a registered tax agent. Although failure-to-lodge penalties may initially appear on your ATO account, these will be remitted for eligible businesses.
Conclusion and Next Steps
To take advantage of this amnesty, eligible businesses should lodge the relevant overdue forms either independently or through a registered tax agent. Although failure-to-lodge penalties may initially appear on your ATO account, these will be remitted for eligible businesses.
For personalised advice and assistance in navigating this amnesty programme, please contact your client manager at KSW.
Author: Darren O’ Malley
*Correct as of 27 September 2023
*Disclaimer – this article has been produced by Kreston Stanley Williamson as a service to its clients and associates. The information contained in the article is for general comment only and is not intended to be advice on any particular matter. Before acting on any areas contained in this article, it is imperative you seek specific advice relating to your particular circumstances. Liability is limited by a scheme approved under professional standards legislation.
