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  • New insolvency reforms to support small business

    The government has made changes to our Insolvency FrameworkExternal Link to help more small businesses restructure and survive the economic impact of COVID-19.

    Where restructure is not possible, businesses will be able to wind up faster, enabling greater returns for creditors and employees.

    Two new processes will be available for small businesses from 1 January 2021:

    • a simplified liquidation framework
    • a small business restructuring plan.

    Eligibility

    The processes will be available to incorporated businesses with liabilities of less than $1 million.

    Businesses will also need to have paid all entitlements of its employees that are due and payable (including superannuation) and have their tax lodgements up to date.

    Small businesses can view their lodgement information via the Business Portal.

    What practitioners need to do

    From 1 January 2021, you can notify us of the proposed plan and supporting documents via the Business Portal.

    The following topic selections will be available on the Business Portal and the Insolvency Cover SheetThis link will download a file (NAT 14588-12.2020):

    • New Insolvency Advice - Streamlined Liquidation
    • New Insolvency Advice - Company Debt Agreement.

    If you are interacting with us via paper or fax channels, please ensure you are using the Insolvency cover sheet and ensure you:

    • Print the document on blank paper only.
    • Do not send correspondence for multiple unrelated taxpayers using one cover sheet.
    • Where a group of related taxpayers exist, complete one cover sheet providing details of only the principal or holding taxpayer.
    • Keep a copy of the cover sheet for your own records.


    See also:

    Last modified: 22 Dec 2020QC 64484