Small business tax amnesty: how to catch-up overdue lodgements without penalties

After a difficult few years for business owners across the country, the Australian Tax Office (ATO) has offered a glimmer of relief with the recent announcement of the Small Business – Lodgement Penalty Amnesty Program. 

Announced in the 2023-2024 Federal Budget, the program will see the waiving of any failure to lodge (FTL) penalties for businesses that have not submitted tax obligations that were due between 1 December 2019 and 28 February 2022. 

To be eligible, your business must be an entity with an aggregated turnover of less than $10 million at the time the original lodgement was due. The amnesty applies to income tax returns, business activity statements and fringe benefits tax returns, but not superannuation obligations or other administrative penalties.

The ATO is urging small businesses to take advantage of the amnesty, which will only be available from 1 June 2023 to 31 December 2023.

"The past few years have been tough for many small businesses, with the pandemic and natural disasters having a significant impact,” said ATO Assistant Commissioner, Emma Tobias.

“We understand that things like lodging ATO forms may have slipped down the list of priorities. But it is important to get back on track with tax obligations. Lodging these forms are not optional, so we hope our amnesty will make it easier for impacted small businesses to get back on track."

Businesses don’t need to do anything to apply for the penalty waiver – they simply need to lodge eligible overdue forms and the ATO will take care of the rest. 

"All you need to do is lodge your outstanding tax returns or activity statements and we’ll take care of the FTL penalty remission from our end. You might see an FTL penalty on your account for a short period of time, but don’t worry, we will remit it."

All businesses – including those that aren’t eligible for the waiver or have returns that fall outside the eligible period – are being urged to catch up overdue submissions, with the ATO indicating possible amnesty for them also. 

"We encourage all businesses to lodge any overdue forms even if they are outside the eligibility period. Whilst forms outside the amnesty eligibility criteria will attract FTL penalties, the ATO will consider your circumstances and may remit such penalties on a case-by-case basis.

“We understand that some small businesses may be worried about paying an amount owing on their overdue lodgement. If you are unable to make full payment of your debt, remember we can work together with you or your registered tax or BAS agent to figure out the right solution for you."

When you’re struggling to make ends meet, engaging with the tax office to discuss overdue submissions and debt can feel like a huge weight on your shoulders. Working with a skilled tax accountant can help to ease this burden, as they can manage the process and negotiate with the ATO on your behalf. 

Whether you have simply fallen behind with lodgements, are worried about overdue tax debt or have ceased trading, quality advice and support will assist you to resolve these issues and determine the most practical and achievable way to move forward.     
 

For more information

For a free initial consultation with an experienced tax accountant or small business restructuring and recovery expert, please contact us.