What is the LVR available for tax debt loans?April 23, 2020
What are the Australian Tax Office collection methods for tax debt?April 23, 2020
Of course, selling your products and services is paramount to every business. However, meeting your tax obligations is critical. As a result, we have seen the most common cause of forced business wind up is tax debt. Therefore, applying for tax debt hardship at an early stage is essential.
Many businesses use the ATO as an unofficial overdraft facility. In effect, they are accruing tax debt by allocating tax payments to pay business expenses or fund growth. Therefore, paying the ATO obligation once the business is trading profitably. However, the ATO is implementing changes to recover funds more quickly, causing issues with these businesses.
The ATO has higher expectations regarding resolving tax debt and how to manage tax portal accounts. In summary, the Australian Taxation Office won’t allow a business to keep inflating tax debts. As such, they are implementing strategies for collection of tax when due.
In brief, if you cannot prove your ability to pay your tax obligations, the ATO will seek:
- Indeed, full payment of the outstanding debt or;
- Secondly, the closure of your business.
- Finally, you may apply for financial hardship & debt relief. However, your application must meet ATO policy guidelines.