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ATO Keeps up the Pressure on Companies With Tax Debts

ATO Keeps up the Pressure on Companies With Tax Debts

Author: Admin/Wednesday, August 12, 2015/Categories: Blog

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The ATO has been toughening its stance on taxpayers for some time and they took another step recently with a hardened approach to enforcement for businesses owing the government $100,000 or more in tax debts.


ATO continues to flex its muscles

In previous posts we’ve covered the various ways the ATO has been taking action on outstanding tax liabilities. This includes through statutory powers to issue Director Penalty Notices and Garnishee notices, and enhanced data matching capabilities to track down and penalise businesses that operate in the ‘cash economy’ to avoid tax obligations.

 We can now add to that list an increased willingness to wind up businesses that have significant outstanding liabilities. This will be a last resort by the ATO – they will still try all of the regular avenues to recover tax debt – but over the past few months the ATO has increased the number of applications to wind up businesses that have significant unpaid amounts of superannuation and GST/PAYG. $100,000+ is the threshold they are targeting in this regard (not that smaller debts are being overlooked, either).

 It’s clear the ATO’s relatively ‘gentle’ approach prevalent during the GFC has well and truly been replaced by a hardnosed attitude. Tax payers will do well to not assume leniency or extra time will be available, as perhaps it was in past years. It’s clear the ATO is acting faster and with more severity than at any point in recent memory.


These days it is best not to assume your business will be ok

 The ATO has been coming at it from a couple of angles lately. Firstly. They’ve been removing tax offsets that may have once been taken for granted – we outlined a number of these in last month’s post. Secondly, the ATO is being more diligent in finding and penalising companies and individuals that avoid tax, by enhancing their internal ability to find the culprits and acting quickly when they do.

 In our experience, and that of others in our industry, the numbers of DPN’s, Garnishee Notices and other penalties issued has increased significantly, as has the number of letters sent to individuals and businesses requesting more information – the first step towards an audit and potential penalty.


Have taxation liabilities? Talk to bTa Vantage

 The short story is: if you own a business that has an outstanding tax debt of more than $100,000 and you haven’t entered into a payment plan with the ATO, your business is at risk of being wound up. If you are in this situation, the key is to take action early and show the ATO you are willing to repay the debt as soon as possible.

 If you are concerned about your situation and have outstanding PAYG, super guarantee or GST obligations, don’t hesitate – get in touch with bTa Vantage for advice on the best course of action.


Disclaimer: This information is generic in nature and provided on a discretionary basis only. You must always seek professional advice regarding its applicability to your own circumstance.

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