Small and Medium Businesses Now Have More Time to Get Tax Returns Right

What’s Changing?

Previously, small and medium businesses generally had two years from the date of their tax assessment to request an amendment. After that, correcting errors or omissions often became a more complex and time-consuming process.

From the 2024–25 income year onward, businesses with an annual aggregated turnover of less than $50 million will now have up to four years to amend their income tax returns.

This extended window gives you more time to:

• Review financial records
• Reconcile discrepancies
• Address any oversights

However, this doesn’t mean you should rush your initial lodgment—getting it right the first time is still important.

🔹 Note: The two-year amendment period still applies to returns for earlier income years.

Your review period begins the day after the ATO issues your notice of assessment. If no notice is issued, it starts from the date you lodged your return.

Why Might You Need to Amend a Return?

There are many reasons why a business might need to lodge an amendment:

• You made a simple data entry error
• You forgot to report some income or capital gains
• You claimed deductions incorrectly—or missed out on ones you were entitled to
• A business event or updated invoice changed your reporting position

Whatever the reason, it’s important to act quickly. If an amendment results in a higher tax liability, interest and penalties may apply—so the sooner you correct it, the better.

What Should You Do Next?

If you discover an error or omission in a lodged tax return:

1. Consult a Registered Tax Practitioner

Tax law is complex, and a qualified adviser can:

• Help you understand the implications of the amendment
• Ensure it’s correctly lodged
• Make sure you meet all ATO requirements
  Many businesses rely on their tax agents to handle amendments directly.

2. Act Promptly

Even with the new four-year window, it’s best not to delay. Lodge your amendment as soon as possible to allow plenty of time for ATO processing. You can submit multiple amendment requests within the review period if needed.

3. Keep Meticulous Records

Well-organised records—such as invoices, receipts, and bank statements—are essential. Without proper documentation, your amendment may not be accepted.

4. Understand Your Lodgment Options

You can lodge an amendment:

• Online via ATO Online Services for Business
• Through your registered tax agent using SBR-enabled software
• By paper, although online options are usually faster

Important Reminders

• The ATO doesn’t charge fees for amendment requests.
• If an amendment increases your tax payable, interest and penalties may apply.
• Voluntarily disclosing errors is usually viewed more favourably than waiting for an audit.
• If the ATO has already notified you of an audit or review, you must inform the assigned officer rather than lodging an amendment.
• Once the four-year amendment period ends, the ATO generally cannot make changes—unless there’s fraud or evasion involved.

Final Thought

The extended amendment period provides greater flexibility and peace of mind for small and medium businesses. But your best tools remain accurate records and a proactive approach. Don’t wait for an audit to uncover an issue—stay on top of your tax affairs year-round.