What Is the LVR Available for Tax Debt Loans?
April 23, 2020What Are the Australian Tax Office Collection Methods for Tax Debt?
April 23, 2020Meeting your tax obligations is critical for every business. Indeed, tax debt is the most common cause of forced business wind-ups. Therefore, applying for ato debt hardship early is essential.
- Many businesses use the ATO as an unofficial overdraft facility, accruing tax debt by using tax payments to cover business expenses or fund growth. However, they usually plan to pay the ATO once the business is profitable. Consequently, the ATO is making changes to recover funds more quickly, which causes issues for these businesses.
- The ATO has higher expectations for resolving tax debt and managing tax portal accounts. The Australian Taxation Office won’t allow a business to keep inflating tax debts. They are implementing strategies to collect tax when due.
In brief, if you cannot prove your ability to pay your tax obligations, the ATO will seek:
- Full payment of the outstanding debt
- Closure of your business
You may apply for financial hardship and debt relief, but your application must meet ATO policy guidelines.