This is the perfect time to get your tax affairs up to date.
Here are three reasons why now is a great time to catch up on your business lodgments.
1. ATO amnesty
The ATO announced a small business amnesty, effective from 1 June 2023. Here is the announcement.
The late fine for a BAS or tax return is $275 per month, for a maximum of five months. That’s $1,375 per BAS.
The amnesty applies to tax obligations, including income tax and business activity statements, that were originally due from 1 December 2019 and 28 February 2022.
This includes the 2020 and 2021 business tax returns, a total of nine (9) BAS statements if you are on a quarterly cycle. That’s 11 lodgments in total, which might have otherwise cost you $14,000 in fines.
It applies if you are a small business, meaning you are carrying on a business and you earn under $10 million.
But the amnesty ends at the end of the calendar year (31 December 2023).
2. Small business debt restructure
Another recent government initiative is the small business restructure.
In January 2021, the government introduced the small business (SB) restructuring plan to give companies an alternative to liquidation. It gives businesses with unsecured debts (including tax debts) the chance to negotiate a reduction of their debt with their creditors.
In the meantime, the company can continue operating in the same business structure, with the same directors.
The ATO counts as one of the creditors in the restructuring. Having spoken to debt restructuring specialist, I’ve heard that the ATO will negotiate a smaller debt in the majority of cases, with one business achieving a reduction of over 80 cents in the dollar.
There are some eligibility requirements, which including catching up on your tax and BAS. You also need to have paid your employee entitlements. If you have late superannuation obligations, we can help you prepare the forms.
If we think you might be eligible we can refer you to a debt specialist once your lodgments are up to date.
And even if you’re not, we are experienced in applying for reductions in interest penalties, and setting up ATO payment plans.
3. Get in before they get tough
The ATO – wrongly, I might add – feel justified in going after small businesses even harder than usual after they’ve given a concession. Twelve months ago, they announced they were chasing small business debt, justifying it based on all the COVID handouts they had given out.
Sadly, they were out of touch. They had no appreciation of the damage done to small business by the lockdown era, and the fact that the staff shortages of 2022 were, in some cases, more harmful to some businesses than the lockdowns themselves.
The point is this: the ATO is likely to start chasing small businesses hard in 2024. In fact, the 2024 budget announced increased ATO funding to go after small business.
The Government will provide funding over 4 years from 1 July 2023 to enable the ATO to engage more effectively with businesses to address the growth of tax and superannuation liabilities. (Budget Paper No 2)
Why hire us?
We’re on your team
We’re here to help you, not to judge you
We don’t pass judgment on small business owners who’ve fallen behind. In fact, we have sympathy for you. We’re a small business, too, and we know the challenges of running a business in the era of lockdowns, labour shortages and ever growing regulation.
You’ll be dealing with CPAs and Chartered Accountants who know the system, and how to help.
We have 12 years of experience dealing with late lodgments. Catching up on tax is a specialty of ours. And we love doing it. Seeing a client move from stressed and uncertain, to relieved and in control is just about the most satisfying part of what we do.
We offer our services Australia wide
We can deal with you online, so you don’t need to leave your home.
We have a physical presence in Melbourne and (to a lesser extent in Perth). But most of our clients use online meetings to chat to us.
The hardest step is the first step.
Book an initial meeting with one of our accountants here: https://www.beyondaccountancy.com.au/bookings/ and start to take control of your tax affairs.
You might have concerns about cost, or questions about the process. So we’re offering an obligation free 30 minute consultation with one of our qualified accountants.
Choose the “Late tax / ATO amnesty” booking option to take advantage of this offer. After the first half hour, you can decide to engage us to start the process for you, or you are free to end the call there.
So often our clients end the process by telling us how relieved they are to have finally sorted things out, and that they wish they’d done it sooner.
We’re here to help when you’re ready.