Small and medium businesses now have more time to get tax returns right

Running a small or medium business means accuracy matters, but errors and changes can still occur. From recent income years, eligible businesses now have more time to amend their tax returns and correct mistakes.

What’s Changed?

Previously, small and medium businesses generally had two years from the date of their notice of assessment to request an amendment to an income tax return. After that period, correcting errors often required a more complex process.

From the 2024–25 income year onward, eligible businesses can now request amendments for up to four years.

Who Is Eligible?

The extended amendment period applies to:

• Small and medium businesses
• Businesses with an aggregated annual turnover of less than $50 million
• Income years starting from 2024–25 onwards

For earlier income years, the standard two‑year amendment period still applies.

When Does the Review Period Start?

The amendment review period begins:

• The day after the ATO issues your notice of assessment, or
• If no notice is issued, from the date you lodge your return

This extended timeframe gives businesses more flexibility to review records, reconcile figures, and address oversights. However, it should not replace careful preparation when lodging your original return.

Common Reasons to Amend a Tax Return

Businesses often request amendments when they:

• Entered incorrect figures due to a simple error
• Failed to report income or capital gains
• Missed legitimate deductions or claimed deductions incorrectly
• Claimed credits they were not entitled to, or failed to claim eligible credits
• Experienced changes after lodging, such as revised invoices or unforeseen business events

Act Promptly When You Find an Error

Although businesses now have more time to amend returns, it remains important to act as soon as errors are identified. If an amendment increases your tax liability, the ATO may apply interest charges and penalties, making early action financially beneficial.

There are no ATO fees for requesting an amendment, but processing times can be lengthy.

Voluntary Disclosure Matters

If an amendment results in additional tax payable, interest and penalties may apply. However, the ATO generally views voluntary disclosures more favourably than errors discovered during an audit.

If the ATO has already notified you of an audit or review, you must disclose errors directly to the assigned tax officer rather than lodging an amendment request.

Key Takeaway for Businesses

The extended amendment period provides greater peace of mind for small and medium businesses. However, strong record‑keeping, timely reviews, and a proactive approach to tax compliance remain the most effective ways to manage your tax obligations and avoid unnecessary costs.