For many business ATO debt can be significant issue. Receiving a notice from the Australia Taxation Office (ATO) indicating a tax debt can be a daunting experience for everyone. If the taxpayer is experiencing financial difficulties in meeting ATO’ obligations, they are encouraged to work with ATO to help manage it.
If the debts are not paid on time, ATO will start charging interest on unpaid amounts. ATO needs to be contacted as soon as possible through messages on myGOV, letters or phone calls. No communication with ATO can lead into stronger action and further penalties. Additionally, taxpayer needs to lodge business activity statements and tax returns on time to avoid penalties for late lodgments.
If tax is not paid on time, ATO will automatically add a general interest charge (GIC) to what you owe. Interest is calculated on daily basis, and it’s added to your account periodically.
ATO debt level is much higher than at pre COVID19 pandemic. Now, we are seeing an increase in enforcement action, an increased focus on individuals, directors and not just the company.
To avoid any late penalties, ATO does provide payment plans where taxpayers set up manageable payment plan to pay their debt.
Also, as taxpayer you may apply to defer your compulsory repayment if you are in serious hardship or for other reasons, such as natural disasters affecting you, death or serious illness.
The ATO wants to help you manage your debt effectively in a way that allows you to continue operating our business. ATO encourage to contact tax advisor and bring all the lodgments up to date if it cannot be paid in full at least to start with a repayment plan.
We help people with the debt get back onto a position of compliance with a payment plant that they can afford and in certain circumstances, where possible, remission of interest in penalties to reduce the overall debt.
Feel free to contact Lana and her team at Matovic Business Accountants if you would like to discuss your business’ accounting tax and bookkeeping needs.
Email us at info@matovicaccounting.com.au or call (07) 3557 5721.
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