How We Can Help
In the ever-evolving landscape of taxation, the Australian Government, as part of the 2023-24 Federal Budget, has introduced a lodgment penalty amnesty program. This initiative, specifically designed for small businesses, aims to encourage entities to bring their tax obligations up to date. As a dedicated accounting practice, we are here to guide you through this process, ensuring you fully understand and can take advantage of this unique opportunity.
Eligibility and Timeframe
The lodgment penalty amnesty program is a government initiative that applies to overdue income tax returns, business activity statements, and FBT returns originally due between 1 December 2019 and 28 February 2022. The amnesty period runs from 1 June 2023 to 31 December 2023, and to be eligible, the overdue obligation must be lodged within this timeframe.
Who Can Benefit?
This program is designed for small businesses, specifically entities with an aggregated turnover of less than $10 million at the time the original lodgment was due. However, it’s important to note that the amnesty does not apply to privately owned groups or individuals controlling over $5 million of net wealth.
Benefits
One of the significant benefits of this amnesty is the automatic remission of Failure to Lodge (FTL) penalties for eligible small businesses that lodge overdue forms within the amnesty period. This remission occurs automatically, negating the need for businesses to separately request a remission. However, it’s crucial to understand that the amnesty does not extend to interest charges on overdue payments or other administrative penalties, such as those associated with the Taxpayer Payments Reporting System.
The ATO’s Small Business Lodgment Penalty Amnesty Program is a government initiative introduced in the 2023-24 Federal Budget. It applies to overdue income tax returns, business activity statements, and FBT returns originally due between 1 December 2019 and 28 February 2022. The program aims to encourage small businesses to bring their tax obligations up to date.
FTL penalties can be a significant burden for businesses. The applicable penalty depends on the size of the entity and the period of time since the lodgment due date. For small entities, the FTL penalty is applied at the rate of one penalty unit for each period of 28 days (or part thereof) that the obligation is overdue, up to a maximum of five penalty units. For medium entities, the penalty unit is multiplied by 2.
What happens if your business is not eligible for the amnesty? There are still options available. For instance, if the taxpayer does not meet the eligibility criteria, or the original due date of the late obligation falls outside of the relevant date range, or the late lodgment occurred before or after the amnesty period, the taxpayer may be able to reduce their FTL penalty under the standard rules. A taxpayer may request a remission of the penalty in full or in part if there are extenuating circumstances, such as being impacted by a natural disaster or serious illness.
At our accounting practice, we understand that navigating the complexities of tax obligations can be challenging. We are here to assist businesses in taking full advantage of the amnesty program. We believe in the importance of getting tax obligations up to date and are fully aware of the potential consequences of not doing so. If your business is behind with its lodgements, we strongly encourage you to reach out to us for assistance.
Conclusion
In conclusion, the lodgment penalty amnesty program is a significant opportunity for small businesses to get their tax obligations back on track. The benefits of seeking professional assistance in this process cannot be overstated. We invite you to contact us to help with your lodgements. Our team of experts is ready to guide you through this process, ensuring your business can move forward with confidence and security.
If you have any questions or would like more information, don’t hesitate to book an online appointment or contact us. Our team of experts is here to help.
