The challenges of 2020 saw ASIC and the ATO offer relief to small businesses in the hope of keeping them afloat: limiting personal liability for insolvent trading, providing financial relief for employers through JobKeeper payments, and taking other actions to lighten the load incurred by small businesses. But in late 2020, ASIC Chairman Karen Chester delivered this bombshell: ‘it is time for us to simply get on with it’.
What Chester means is that it is time for ASIC to crack down on enforcement and stop its sympathy towards small businesses—despite the fact that many businesses are still recovering from huge financial blows and struggling to stay operative.
The big problem in our eyes is that many business owners are unaware of their many obligations and responsibilities. Small businesses are required to comply with legal requirements set by both ASIC and the ATO. Failure to do so results in fees and penalties and, in extreme cases, company deregistration for non-compliance. So it’s essential that your compliance with these regulatory bodies is immaculate.
But how can small businesses ensure immaculate compliance with ASIC and ATO? As mentioned, many of the laws affecting small businesses changed to offer relief in 2020. In 2021, these laws changed again. Further, as a result of the pandemic, many businesses have gone through dramatic changes—to their staff, their service offering, their company direction—which means they may be subject to other sets of obligations that didn’t affect them before.
In recognition of these difficulties, we’ve put together a checklist for small businesses to ensure ASIC and ATO compliance. Note that it is not exhaustive, but it gives you an idea of the types of legal obligations you should be thinking about to ensure your compliance with ASIC and ATO. For specific, tailored and comprehensive advice, give us a call on +1 (02) 8080-7585.
ASIC Compliance – have I…
- Registered a company or business name?
If yes, view your obligations here. If no, continue down the list.
- Renewed the registration of a company or business name?
If yes, view your obligations here. If no, continue down the list.
- Deregistered a company or cancelled a business name?
If yes, view your obligations here. If no, continue down the list.
- Reported misconduct by a financial product or service provider?
If yes, view your obligations here. If no, continue down the list.
- Verified information about other businesses?
If yes, view your obligations here. If no, continue down the list.
- Checked the changes to the insolvency laws under the Corporations Act to see how they impact my business?
Read our blog here for details on these changes.
- Developed a comprehensive plan in the event of insolvency?
Having an awareness of the insolvency laws is only step one to ensuring your compliance.
Small businesses with liabilities under $1M may continue trading provided they develop a plan to present to creditors. When developing this plan, there are numerous steps small businesses must comply with to continue trading legally.
It is essential to be aware of these steps to ensure your compliance is perfect. You can read more on our blog here.
- Developed a COVID-safe plan and procedures to continue operating in the event of another lockdown?
- Made my employees, supply chain and parties I work with aware of the COVID-safe plan and procedures to continue operating in the event of another lockdown?
ATO Compliance – have I….
- Checked which JobKeeper arrangements apply and to whom, as well as when they will run out?
The Morrison Government is extending JobKeeper until 28 March 2021.
But, the rules around JobKeeper have changed as have the rates available.
It’s critical that you’re on top of how these rules will impact your employees, and equally importantly, what will happen when these relief runs out.
- Checked the aggravated turnover of my businesses?
When the ATO says turnover, they mean aggravated turnover. This is generally your annual turnover plus the annual turnover of any business. - Checked which tax concessions will apply to my business when it comes time to lodge my tax return?
Tax concessions for small businesses have changed. In particular, changes have been made to:
- Simplified depreciation rules – instant asset write-off
- Backing business incentive – accelerated depreciation
- Accelerated depreciation for primary producers
- Lower company tax rate changes
- Expanded access to small business concessions
- Increased small business income tax offset
- Identified where my debts came from last year and put in place a plan to address these for this year?
While the regulatory bodies showed sympathy in 2020 for debts incurred by small businesses, it’s unlikely they’ll be lenient with any ongoing and identifiable debts moving forward.
If you are unsure how any of the above applies to your business, get in touch with Green & Associates on +1 (02) 8080-7585 for tailored advice designed to keep your business going strong or help your business get back on its feet. We are experienced in helping the local Potts Point and Kings Cross business community with a broad range of business and other disputes.
