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. Because of this, we thought it was worthwhile opening this discussion on our website. If you read on, you will understand the ATO's point of view on Tax Debt, the businesses involved and the ATO's collection process.
The ATO has quite a large sum of outstanding taxes they are seeking to recover. As you see above, it is mostly from small businesses. This may change as they focus on large multinationals that have not been required to collect GST on their behalf until recently.
"The ATO was pursuing these 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. This includes an internal business viability tool. Its function is to assess a businesses capacity to function within their guidelines. They also have financial modelling tools to assess cash-based businesses, such as market stallholders and grocers. This tool can assess the income and expenditure based across other like businesses and present an estimate of the tax owed.
Each of the stages of the collection above has in its own right, a set of specified actions to communicate and recover unpaid taxes. The 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 your liability to the tax department. This may be any or all of the following:
This is the sort of situation we work with every day. Our specialty is identifying how different business debt problems may be solved and when necessary, apply for tax debt finance or other business debt solutions.
Call Loan Saver Network to discuss your situation and the potential for a loan to clear your tax debt on 1300 796 850.