On 9 May 2023, as part of the 2023-24 Budget, the government introduced a Lodgment Penalty Amnesty Program aimed at small businesses. The program encourages them to re-engage with the tax system and bring their obligations up-to-date without incurring late payment penalties.
Key Program Details:
• The amnesty covers overdue income tax returns, business activity statements, and fringe benefits tax returns that were originally due between 1 December 2019 and 28 February 2022.
• Small businesses that meet the eligibility criteria and submit overdue lodgments between 1 June 2023 and 31 December 2023 will have any failure to lodge penalties remitted automatically. No additional action is required to request this remission.
• To qualify for the amnesty, a small business must have had an annual turnover of less than $10 million when the original lodgment was due. This program does not apply to privately owned groups or individuals with over $5 million in net wealth.
Positive Response:
An Australian Taxation Office (ATO) policy allowing small businesses to submit overdue tax debts without incurring late payment penalties has been well-received. Within the first two months of its launch on June 1, 2023, over 7,200 small businesses have taken advantage of this opportunity. In total, more than 19,500 eligible overdue forms have been successfully lodged as part of the amnesty.
Reminder on Obligations:
While the amnesty provides relief from fines, the ATO wants to emphasise that it does not absolve small businesses of their debts. It is crucial to understand that lodging these returns are mandatory, and small businesses are encouraged to make use of this unique opportunity promptly to ensure they can meet their obligations without penalties.
Timely Action Encouraged:
Small businesses with up-to-date lodgments gain a better understanding of their financial standing, including any amounts owed to the ATO. It is advisable for those who can pay to do so, on time and in full to prevent the accrual of additional interest charges.
Important Dates:
The Lodgment Penalty Amnesty Program will officially conclude on 31 December 2023. For businesses with late payments outside of the amnesty period, ordinary penalty remissions can be applied for on a case-by-case basis.
If you are a small business requiring assistance with lodgment, you can book an obligation free consultation with us here.
The amnesty will not apply to late superannuation obligations and other penalties linked to the Taxable Payments Reporting System. Businesses with late payments outside of the amnesty period can still apply for ordinary penalty remissions on a case-by-case basis.
This initiative serves as a temporary opportunity for small businesses to get their tax affairs in order, aligning with the ATO's commitment to support businesses affected by challenging circumstances such as bushfires, flooding, and the economic impact of the COVID-19 pandemic.
