Tax Debt and the ATO
We are currently receiving many questions from our clients regarding the Australian Tax Office and their tax debt collection processes. There has been an increase in activity in the ATO’s collection activities so we though it was worthwhile opening this discussion. Read on to understand the ATO’s point of view on Tax Debt, the businesses and the ATO’s collection process.
Point of View:
The ATO has quite a large sum of outstanding taxes they are seeking to recover mostly from small businesses.
The ATO was pursuing the businesses because of the threat they posed to counterparts, Mr D’Ascenzo told BusinessDaily. “We have increased the number of bankruptcies and liquidations where we are the one instigating it because – having [been offered] a lot of payment arrangements – some people aren’t able to hold up their end of the bargain,” he said.
The ATO uses various tools to assist in their collection and decision making. Including an internal business viability tool to assess a businesses capacity to function within their guidelines, and a financial modelling tools to assess cash based businesses, such a market stall holders and grocers. This tool can assess the income, expenditure based across other like businesses and present an estimate of the tax owed.
Each of the stages of collection above has in its own right, a set of specified actions to communicate and recover unpaid taxes. It ATO has indicated that they will progress each stage if the business fails to meet arrangements or communicate a willingness to meet arrangements. The end result of non compliance and payment would be bankruptcy and/or winding up the company/business.
If you are in this situation it is important to take fast action to rectify the liability to the tax department. This may be any or all of the following:
Call Loan Saver Network to discuss your situation and the potential for a loan to clear your tax debt on 1300 796 850.