Small Business Lodgement Penalty Amnesty: ATOs lifeline to eligible businesses with outstanding tax debts
21 June 2023 | Minutes to read: 2

Small Business Lodgement Penalty Amnesty: ATOs lifeline to eligible businesses with outstanding tax debts

By William Buck

Small businesses have a one-off amnesty to lodge outstanding tax returns without penalties.

The amnesty operates until 31 December 2023 and allows small businesses to lodge outstanding tax returns and business activity statements (BAS) that were due between 1 December 2019 and 28 February 2022, without incurring penalties.

The Federal Government has established the amnesty as part of the 2023-24 Federal Budget, to recover some of the estimated $30 billion in small business tax debt.

It applies to businesses with an annual turnover of under $10 million at the time the original lodgement was due.

How will the amnesty assist my business?

Lodging a tax form late can expose your small business to a $1,100 penalty. If you utilise the amnesty, that penalty will be automatically waived. Lodgements need to be done by 31 December 2023.

ATO repayment options

The outstanding lodgements are only one part of the issue. Many small businesses have outstanding tax debts, and getting your tax lodgements up to date may crystalise further tax debts.

If you are concerned about finding the funds to make payment, you should contact an advisor to discuss your available options and effectively manage your obligations. We are already seeing an increase in ATO debt recovery actions and we expect the ATO to further ramp up enforcement activities once the amnesty has ended.

An option that might be available to your business is establishing a repayment plan with the ATO. At present, the tax office has around 400,000 active payment plans – 300,000 of which belong to small businesses.

There are several repayment options offered by the ATO:

  • Self-service payment plan: This is only available to tax debts under $100,000 and has a standard 28-day processing time. The proposed plan should enable the debt to be paid off in two years or less, and the first payment must be scheduled within seven calendar days of the request.
  • Proposing a payment plan: These plans are offered on a case-by-case basis and the ATO considers many factors when assessing eligibility including compliance history, risk mitigation and the size and age of debts

How do I access the amnesty?

To access the small business lodgement penalty amnesty, lodge your relevant forms either independently or through a registered tax agent.

Failure to Lodge penalties may appear on your business’s ATO account, however eligible fines will be remitted.

While the amnesty only covers outstanding tax obligations originally due for lodgement within the period mentioned above, we urge businesses to lodge all overdue forms as the Australian Taxation Office considers circumstances on a case-by-case basis and may waive penalties.

It’s also important to communicate with the ATO because outstanding obligations and a lack of communication can trigger an ATO review or audit.

For help accessing the amnesty or engaging with the ATO on a potential repayment plan, contact your local William Buck tax advisor.


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