According to recent reports, the ATO is focusing on small and medium businesses to recover outstanding tax debts, with an apparent increase in calls and letters to directors of companies that owe the ATO money.
Historically, the ATO has been more inclined to pursue debts during times of budget deficit and now, with the recent changes to the budget showing lower government receipts, is one of those times with the ATO clearly being under more pressure to increase revenue by collecting more debts and ensuring compliance.
Finance services are seeing evidence of the ATO’s more aggressive collection activities through the use of calls and letters demanding payment. Further, are also seeing the tax office issuing written warnings that director may be held personally liable for unpaid PAYG and unpaid superannuation where BAS’ are not lodged within 3 months of the due date.
If you receive a letter or call from the ATO regarding a tax debt, we advise you to proceed with extreme caution.
Many requests from the ATO will seek some action including the idea of setting up a repayment plan to pay the outstanding tax debt. These plans, whilst apparently helpful in relieving the immediate pressure from the tax office, can have the effect of committing a director to personal liability for a company tax debt.
The problem then for small business owners if they sign up to such an agreement is that not only are they trying to avoid the prospect of liquidation for their company but that they know they will then face bankruptcy and the subsequent loss all their personal assets in cases where the repayment plan fails.
If you currently have a tax debt with the ATO and you receive a call or letter asking for payment, we strongly recommend that you seek immediate help from an experienced insolvency practitioner or liquidator who understands and who is a specialist in dealing with tax debts of this type.
Proper steps must be taken early in order to limit your personal exposure to a company tax debt.
Ignoring the problem or agreeing to a personal guarantee will place your personal assets, including the family home and anything else of value, within the reach of the ATO should your business fail.
If you have received a demand from the ATO, or fear one may be on the way, you should call The Insolvency Experts free advice line that is open 24 hours per day. The line offers free insolvency and businesses liquidation advice to all business owners. All calls are answered by a senior partner with confidentiality assured.
Free Call now, 24/7 on 1300 767 525
Do you have have any questions or suggestions? Fill free to write in comment section.
Like Us On Facebook
Post a Comment