For small businesses in Australia, managing tax obligations can be a complex and sometimes overwhelming task. Late lodgement of tax returns is not uncommon, but it can lead to penalties and additional financial burdens. However, the Australian Taxation Office (ATO) has introduced a Late Lodgement Penalty Amnesty for small businesses, offering a unique opportunity to rectify past mistakes and get back on track. 

1. What is the ATO Late Lodgement Penalty Amnesty?

The ATO Late Lodgement Penalty Amnesty was announced in May 2023 for the 2023-24 budget and is a time-limited initiative aimed at providing relief to small businesses that have fallen behind on their tax return lodgements. Under this amnesty, eligible businesses have been afforded a grace period for Business Activity Statement (BAS), Fringe Benefits Tax (FBT) and income tax returns originally due between 1 December 2019 and 28 February 2022. 

With the extension, businesses now have until between 1 June 2023 and 31 December 2023 to lodge their returns without being at risk of incurring harsh Failure To Lodge Penalties (FLT).

2. What are the Benefits of the Amnesty?

Participating in the Late Lodgement Penalty Amnesty can offer significant advantages for small businesses:

  • Penalty Waiver: Eligible businesses can have any associated late lodgement penalties completely waived by the ATO.
  • Debt Resolution: By clearing up past lodgement issues, businesses can proactively address their tax debt, paving the way for a fresh financial start.
  • Improved Compliance: The amnesty encourages businesses to become compliant with their lodgement obligations, promoting better tax management practices in the future. 

3. Who is Eligible for the Amnesty?

To qualify for the Late Lodgement Penalty Amnesty, businesses must meet certain criteria:

  • Be a small business with an annual turnover of less than $10 million.
  • Have an outstanding BAS, FBT or tax return originally due between December 2019 and 28 February 2022

4. Important Points to Consider:

  • Act Promptly: Forming positive tax habits is critically important for businesses now, as the amnesty stands as the last ‘olive branch’ of pandemic-related leniency. Moving forward, Australians can expect firm recovery action and usual procedures to be reinstated by the ATO.
  • Have A Plan: Once your return is lodged, the ATO will expect you to have a plan to repay your debt. If you’re unable to repay your debt, they may encourage insolvency proceedings. In this case, it may be best to simply appoint a liquidator straight away.
  • Seek Professional Guidance: Engaging with the professional team at Tax Negotiators will provide you with the expertise needed to navigate the amnesty successfully and maximise its benefits for your small business.

The ATO Late Lodgement Penalty Amnesty for small businesses presents a unique opportunity for rectifying past lodgement issues and getting back on track with your tax obligations. By participating in this initiative, eligible businesses can benefit from a penalty waiver and improve their compliance with the ATO. Seeking guidance from the professional, compassionate and discreet team at Tax Negotiators can help to ensure a smooth process and maximise the advantages of this limited-time opportunity. 

If you’re ready to address your late lodgements and pave the way for a more financially secure future for your small business, contact our team at Tax Negotiators today!

📞 1300 277 148