The Lodgment Penalty Amnesty for small businesses, introduced by the Australian Government on 9 May 2023, was designed to provide a lifeline for struggling businesses to catch up on their tax obligations and re-engage with the tax system. As the end of the year approaches, so does the deadline for this valuable program. If you haven’t taken advantage of the Lodgment Penalty Amnesty yet, now is the time to act before it’s too late.
Eligibility criteria
To be eligible for the amnesty, your small business must have had an annual turnover of less than $10 million at the time the original lodgment was due. The program applies to overdue income tax returns, business activity statements, and fringe benefits tax returns that were due between 1 December 2019 and 28 February 2022. If your business meets these criteria, you have a chance to rectify your overdue tax forms without incurring penalties.
Automatic remittance of failure to lodge penalties
If you lodge your eligible forms between 1 June 2023 and 31 December 2023, any failure to lodge penalties will be remitted automatically. This provides a significant opportunity for small businesses to bring their tax obligations up-to-date without the burden of additional financial penalties. However, it’s crucial to note that any forms lodged after 31 December 2023 may not receive penalty remittance.
Importance of prioritising lodgment obligations
Bringing your lodgments up-to-date is not only a requirement, but also crucial for understanding your net tax position. By prioritising these obligations over other tasks, you can gain clarity on your financial standing and ensure compliance with the tax system. Given that many professional practices, including Regency Partners, close over the Christmas period, it is essential to act promptly to meet the looming deadline. Regency Partners will be closing for the festive season at 1pm on 22 December 2023 and will reopen on 8 January 2024, so plan accordingly.
Taking advantage of the Amnesty
To participate in the Lodgment Penalty Amnesty, you must lodge your eligible income tax returns, business activity statements, and fringe benefit tax returns within the amnesty period. It is highly recommended to seek assistance from a registered tax professional or BAS agent who can guide you through the lodgment process and ensure accuracy.
At Regency Partners, our experienced team is well-versed in the lodgment requirements and can provide the expertise you need to make the most of the amnesty program. We understand the potential complexities involved and can help you navigate through them with ease.
Remittance of penalties for directors
Directors can also benefit from the amnesty program by bringing their company lodgments up to date. If you rely on company lodgments to finalise your own tax affairs, any failure to lodge penalties will be remitted for eligible lodgments made between 1 June and 31 December 2023. Seize this opportunity to rectify any outstanding obligations and avoid potential penalties.
Payment options for tax debts
Ideally, it is advisable to pay any tax debt in full. However, if you’re experiencing financial difficulties, you may be eligible to set up a payment plan with the Australian Taxation Office (ATO). Payment plans require an upfront payment and should be completed as soon as possible to avoid additional complications. It’s essential to address your tax debts proactively to ensure a strong financial foundation for your business.
Seek professional assistance
Navigating the lodgment process and understanding your tax obligations can be complex. Therefore, it is highly beneficial to seek assistance from registered tax professionals or BAS agents such as Regency Partners. Their expertise will not only help you meet the lodgment requirements but also provide valuable insights into optimising your tax position and ensuring compliance with the tax system.
Act now to avoid penalties and enforcement actions
The Lodgment Penalty Amnesty program has provided a valuable opportunity for small businesses to rectify their overdue tax forms without incurring penalties. However, this program is ending soon, and time is running out. As the calendar year draws to a close, it is crucial to act now to ensure you don’t miss out on the benefits it offers. By taking advantage of the amnesty, you can bring your tax obligations up to date, avoid potential penalties, and sidestep further enforcement actions by the ATO.
Conclusion
The Lodgment Penalty Amnesty for small businesses is reaching its deadline, and the time to act is now. Don’t let this opportunity slip away. If you haven’t taken advantage of the amnesty yet, ensure you lodge your eligible forms within the amnesty period to remit failure to lodge penalties automatically. Seek professional assistance to navigate the process effectively and bring your tax obligations up to date. Act now to secure your business’s financial standing and avoid potential penalties and enforcement actions. The deadline is approaching – make sure you don’t miss it!
If you’re a small business owner looking to take advantage of the Lodgment Penalty Amnesty and ensure compliance with your tax obligations, visit the ATO’s website. Additionally, you can reach out to our team at Regency Partners for guidance and support in navigating the lodgment process successfully.
