As we shiver our way through this last month of Winter and continue to watch the ATO (Australian Taxation Office) emerge from its covid induced period of hibernation, I wanted to share with you some intel on affordable and sustainable payment arrangements.
If your client has ATO debt, the only way to protect them from further recovery action is a compliant payment arrangement.
Voluntary payments towards a debt will no longer prevent the ATO taking further recovery action, including Director Penalty Notices.
The negotiation of a suitable payment plan to manage a tax debt is an achievable option for most business and an essential step to preventing further action from the ATO.
With ATO debt collection amping up, there is one thing that is certain – debt cannot be ignored. The ATO is not a cheap bank! ATO debt incurs interest at a current rate of 8%, which is compounded daily!
For a long time, the ATO has been viewed as an easy ‘Small Business Bank’ particularly during covid, where voluntary payments were sufficient.
However, times have changed. We know businesses are still facing tough times with staff shortages, increased costs and large interest rate rises, however for the ATO, it is very much back to business as usual.
There are also very serious consequences to debt that isn’t in a compliant arrangement including:
- Reporting of the business to credit reporting agencies
- Personal liability of the directors
- Garnishee notices
- Windup and bankruptcy proceedings.
Many people believe there are only 2 solutions, pay the debt in full or ignore it!
This isn’t true. Understanding your options and seeking expert advice to negotiate the best solution for the business is the path forward. Payment plans can be obtained that match a business’s cash flow, and take the stress and pressure off the business, rather than creating more stress.
This is what we love to see – business continuity without the financial pressures, and business owners and directors being able to sleep at night knowing the debt is well managed.
To assist with immediate finance to pay a Tax Debt. Check HERE
If you need Tax Debt help, we have a 2 Step Solution Check HERE to learn more