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The Australian Tax Office (ATO) has introduced a new way to make businesses act on their tax debts. Any business that has over $100,000 in tax debts will be receiving a letter from the ATO, if they haven’t already, compelling the company to make a firm effort to manage their debts within 28 days.
Interested in finding out more about the ATO’s new debt disclosure powers? Read more from the Gold Coast insolvency lawyer team at Crest Lawyers to find out.
What do the new ATO debt disclosure powers mean?
In August, the ATO commenced sending out letters to businesses who have over $100,000 in tax debts.
What tax debts are included:
- Activity statements
- Fringe benefits tax
- Interest
- Outstanding income tax
- Penalties
- Superannuation guarantee debts.
What’s the difference this time? Well, under new debt disclosure laws, not acting upon the instructions of the letter will make the ATO disclose tax debt information to credit reporting bureaus, such as Experian or Equifax.
What to expect
This is the first time the ATO has followed through on the new compliance process since the Australian Government introduced the disclosure of business tax debt measures in 2019.
If your business is free of tax debts, or taking a dedicated approach to manage these debts, there’s nothing more to expect.
However, if you have received this letter from the ATO or are expecting one, know that the days of ignoring the ATO’s attempts to work with your business in managing the tax debts are numbered.
Wrong timing?
Many industry professionals are concerned at the timing of the ‘crackdown’ on tax debts because many businesses throughout the country are in a prolonged lockdown.
Some industry professionals are calling on the ATO to postpone this program, with CPA Australia’s senior manager of tax policy, Elinor Kasapidis saying:
“If the ATO proceeds, it needs to be flexible in its approach when dealing with businesses under financial stress. We’d be very concerned if businesses lost the ability to negotiate a payment plan that worked for them.”
However, other industry professionals like Neil Billyard, national head of tax at BDO Australia, admits that the ATO has been “quite lenient” over the past 18 months, allowing taxpayers to defer their payments without the risk of penalties or accrued interest.
Understand your options with a Gold Coast insolvency lawyer
Have you received a letter of this effect from the ATO or are you expecting one in the near future?
If you’re worried what this means for you and your business, seek expert advice from a Gold Coast insolvency lawyer.
Why?
- As Crest commercial lawyers, we can devise, address and implement restructuring strategies when debtors are unable to pay debts to its creditors.
- We can assist in all stages of the insolvency process (if it comes to insolvency) from negotiation to administration.
Before you engage an insolvency lawyer, talk to your business accountant for tailored advice and to better understand balancing paying down debts against cash flow needs. The team at Crest have your best business needs at heart.
Looking for a professional Gold Coast insolvency lawyer? Contact Crest Lawyers today for comprehensive specialist legal services offered by our expert commercial lawyers.
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Disclaimer: The content contained in this news post is general in nature and is intended to provide a general summary only and should not be relied on as a substitute for legal advice.
