If you run a small or medium business, you know that financial accuracy’s important but sometimes mistakes can happen or information can change. Starting this year, though, you have more time to amend your return and get things right.
Before this change, small and medium businesses generally had a two-year period from the date of their tax assessment to request an amendment. If you discovered an error or omission after this two-year window, correcting it could become a more complex process.
Now, for the 2024–2025 and later income years, small and medium businesses with an annual aggregated turnover of less than $50 million will have up to four years to request amendments to their income tax returns. This gives more time to review records, reconcile figures and address any oversights – but remember, it’s not an excuse to rush your first lodgment.
For earlier income years, the two-year amendment period still applies.
Your review period starts the day after the ATO issues your notice of assessment for the relevant income year. If no notice is issued, it starts from the date you lodged your return.
Here are some common scenarios where you might need to request an amendment:
- you made a simple error when entering figures;
- you forgot to report some income or capital gains, or claim legitimate deductions;
- you incorrectly claimed deductions or credits, or failed to claim ones you were entitled to; or
- circumstances changed after lodging and affected something you’d already reported, like a revised invoice or a business event you hadn’t factored in.
Whatever the reason, it’s important to correct any errors as soon as you identify them. For example, if an amendment leads to an increased tax liability, time-based interest and penalties might apply, so prompt action’s still beneficial.
There are no ATO fees for amendment requests, but processing can take a substantial amount of time.
If you discover an error that increases the tax you owe, you may face interest charges and penalties. However, voluntary disclosure of mistakes is generally viewed more favourably than errors discovered during an audit.
If the ATO’s already notified you of an audit or review, you must tell the assigned tax officer about any errors rather than lodging an amendment request.
Remember, the extended amendment period offers greater peace of mind, but good record-keeping and a proactive approach remain your best tools for managing your tax affairs effectively.
