An amnesty is a period of time where the consequences of not following a rule are removed.
If your late lodgements and fear of penalty have been keeping you awake at night, you are in luck, thanks to the small business lodgement penalty amnesty. So far, more than 7,000 Australians have taken advantage of the initiative that was announced as part of the 2023-2024 federal budget.
If you haven’t taken action yet, you still have time but it is running out. The applicable dates of amnesty span four years, from December 2019 to February 2022, and the cut-off date to lodge is December 31, 2023.
The amnesty will help you bring income tax returns, fringe benefits tax and business activity statements up-to-date without the hefty failure to lodge penalties. Beyond December 2023, the government will likely return to the more traditional modes of recovery.
An annual turnover of less than $10 million is the key eligibility criterion. This doesn’t apply to private holdings that control more than $5 million of net wealth. The amnesty cannot be applied to superannuation obligations and it also doesn’t include other administrative penalties, for example, those connected with the reporting system for taxable payments.
Catch up on your obligations post-covid
The Amnesty Program is an excellent opportunity for any small business who (understandably) fell behind on the tax lodgements during COVID-19. This is a chance to move forward from what has been a difficult time in business. We highly recommend any business that is eligible to take advantage of this scheme.
How to maximise the benefits of the amnesty scheme
The amnesty is an opportunity to leave problems behind by getting your tax obligations up-to-date and if appropriate to your circumstance.
Go one step further with Small Business Restructure (SBR)
In addition to the amnesty Scheme, you could go one step further and take advantage of a small business restructure (SBR). An SBR used in conjunction with the small business lodgement penalty amnesty could turn your business around in a meaningful way.
So many small business failures in Australia could have been avoided if they had reached out for advice and support. The first and probably most difficult step is to realise there is a problem.
Small business restructuring was once a very difficult process but a change of legislation in January 2021 has made the process very accessible and simple. The current window of opportunity to take advantage of the taxation amnesty and a small business restructure could see your business debts restructured to manageable levels. At Rodgers Reidy we have had 100% success with the small business restructures that we have worked on.
Small business restructure vs voluntary administration
Small business restructuring is a new solution that is a faster and more affordable option for small businesses, whereas voluntary administration is a more familiar term and a more traditional approach to restructuring businesses in distress.
In a small business restructuring the directors of the business maintain control and a restructuring practitioner works with the company to develop the restructuring plan. During this process, the company is able to continue ‘business as normal’.
In voluntary administration, the administrator takes complete control of the business and all assets of the Company while a Deed of Company Arrangement or DOCA is negotiated. The DOCA is a proposal to creditors to compromise their debts for less than 100c in the dollar.
We are here to help, not to judge
Rodgers Reidy are experts in both voluntary administration and small business restructuring. We understand the stress of financial pressure and we pride ourselves on being both professional and supportive. It never hurts to reach out and ask questions and doing so could save your business. The more information you have, the less stressed you are likely to feel. There are solutions available and we are here to help, not to judge.