Many small businesses are turning to Small Business Restructuring (SBR) to manage ATO debt. For accountants, understanding the restructure rules isn’t optional. It’s the difference between helping clients regain control and watching them slide into liquidation.
SBR was introduced in 2021 as a simplified insolvency process, designed to keep directors in control while providing a formal path to deal with debt. Since it’s still relatively new, many accountants have had limited exposure to it.
We’ll explain what the process involves, the rules you need to understand, and the role accountants can play in ensuring the best outcomes for their clients.
What Are the Small Business Restructure Rules?
SBR lets eligible companies create a repayment plan for their debt, which often includes ATO liabilities. The company appoints a Small Business Restructuring Practitioner (SBRP) — a licensed insolvency expert who guides the process and deals with creditors.
Throughout this process, directors remain in control of the company.
To be eligible, a company must meet the following rules:
- Liabilities under $1 million (excluding employee entitlements)
- Tax lodgements up to date (including BAS, IAS, and income tax returns)
- Employee entitlements paid (including superannuation)
- No prior restructure or simplified liquidation within the last 7 years
- Insolvent or likely to become insolvent
If these criteria are met, directors can resolve to appoint a practitioner. They then have 20 business days to propose a restructuring plan for creditors to vote on. Approval requires more than 50% by value of responding creditors.
How Small Business Restructuring Helps Companies Manage ATO Debt
The SBR regime had a slow start but has now grown significantly. ASIC recently revealed:
- 3,388 restructures commenced between July 2022 and December 2024 (up from just 82 in the initial 18 months)
- Construction and Accommodation & Food Services were among the most represented industries
- There was an 87% creditor approval rate in 2023–24
- As of April 2025, 93% of companies that completed an SBR plan by March 2025 remained registered.
These figures show SBR is not just theoretical; it’s keeping businesses alive, addressing ATO debt, and providing meaningful returns to creditors.
Why Accountants Need to Be Across Small Business Restructuring
For accountants, understanding the small business restructure eligibility criteria and process is critical because your role often determines whether a plan is successful. You’re the first professional clients turn to when they can’t pay their tax bill, fall behind on super, or struggle with suppliers’ payment terms.
Accountants add value by:
- Identifying financial distress early — spotting overdue ATO obligations or cash flow shortfalls before they become detrimental
- Ensuring compliance — helping clients keep up with lodgements and employee entitlements to meet the eligibility criteria
- Forecasting and reporting — supporting clients and restructuring practitioners with reliable numbers for realistic repayment schedules
Accountants can help clients use SBR to restructure debt (including ATO debt) while avoiding harsher outcomes such as liquidation.
How SALEA Advisory Works With Accountants
At SALEA Advisory, we know outcomes are strongest when accountants and restructuring specialists work closely together. Our role is to oversee insolvency, while you remain the indispensable adviser with deep knowledge of your client’s business.
We work closely with accountants to:
- Structure realistic repayment plans that creditors are likely to accept
- Handle compliance with ASIC requirements
- Preserve your clients’ trust by guiding them through the SBR process together
Common Questions About Small Business Restructuring
How does SBR differ from voluntary administration?
Voluntary administration hands the company over to an independent administrator, while small business restructuring allows directors to stay in control of business operations. SBR is typically simpler and cheaper for eligible small businesses.
Can the ATO reject small business restructuring plans?
Yes. The ATO is often the major creditor and must be persuaded that the plan provides a better return than liquidation.
What happens if creditors reject the plan?
The company may move into voluntary administration. During this process, an administrator can assess whether the business is still viable and, if so, propose a Deed of Company Arrangement (DOCA) as an alternative means of restructuring and repaying debts.
If there is no realistic chance of recovery, voluntary administration may be bypassed altogether, and the company may proceed directly to liquidation.
Early preparation and accurate financials give clients the best chance of having their plan accepted and avoiding these harsher outcomes.
Partnering With a Small Business Restructuring Practitioner for Better Outcomes
SBR helps struggling businesses manage ATO debt and continue trading while paying meaningful dividends to creditors.
Now that you know the small business restructure process, the eligibility requirements, and why the regime is gaining momentum in Australia, your next step is to support your clients through this process. By acting early and guiding them with accurate financial data, you can improve their chances of success and protect their assets.
Partnering with experienced small business restructuring specialists for your client’s company restructuring allows you to harness years of insolvency expertise to achieve the best outcome.
Download our Guide to Small Business Restructuring to learn more, or contact SALEA Advisory today to discuss how we can support your clients through their restructuring.
