Recognising recent challenges for small businesses, the government has introduced a Lodgement Penalty Amnesty Program to provide relief to small businesses and encourage their re-engagement with the tax system.

The Amnesty Program: An Overview

On 9 May 2023, as part of the 2023-24 Budget, the government unveiled the Lodgement Penalty Amnesty Program as a proactive measure to support small businesses in meeting their tax obligations. This program offers a temporary amnesty on overdue income tax returns, business activity statements, and fringe benefits tax returns that were originally due between 1 December 2019 and 28 February 2022. It essentially covers the catchup lodgements for 2018 – 2021 tax returns, FBT returns and BAS that may have fallen behind since COVID’s impact.

Important Dates

Lodgement of overdue forms under this program must be submitted by 31 December 2023.

Eligibility Criteria

Lodgement is the only action required by eligible small businesses who meet the following criteria:

Annual Turnover: The small business must have had an annual turnover of less than $10 million at the time the original lodgement was due. This turnover threshold ensures that the program benefits those businesses that fall within the small business category.

Exclusions

It is important to note that the amnesty program does not extend to privately owned groups or individuals controlling over $5 million of net wealth. The focus of this program is specifically on supporting small businesses with limited resources and financial capabilities.

Purpose of the Amnesty

Penalty Remission: By participating in the program and lodging overdue forms within the amnesty period, small businesses will have any failure-to-lodge penalties associated with the late lodgment remitted. This provides a significant financial relief, allowing businesses to allocate their resources more effectively towards their operations.

Encouraging Compliance: The program serves as a catalyst for small businesses to re-engage with the tax system and bring their obligations up-to-date. It offers a fresh start and an opportunity to rectify any past non-compliance issues without incurring additional penalties.

Streamlined Process: Under the amnesty program, no action is required to request a penalty remission. Once eligible forms are lodged within the amnesty period, the remission will be applied automatically. This simplifies the process for small businesses and reduces administrative burdens.

Improved Cash Flow: By avoiding penalty payments, small businesses can improve their cash flow and allocate those funds towards essential business activities such as investment, growth, and meeting operational expenses. This financial flexibility is crucial for the long-term sustainability of small businesses.

Contact your Altitude Adviser to discuss further or to see how this program may affect your personal circumstances.