Dear {{first_name}}, 

Facing a tax bill is a common challenge for many Australian businesses, and the ATO has recently shifted to a more active approach to debt recovery. However, this doesn't mean they're out to get you. The ATO’s primary goal is to work with businesses to manage and clear tax debts effectively.

You or your tax agent can review your income tax assessment notices or use the ATO's online services to check your current tax debt. You can also contact the ATO directly by phoning 13 28 66 (the business enquiries line).

If you find yourself unable to settle your tax debt in full by the due date, don't panic. The ATO offers several repayment options, including:

• Self-service payment plans: For debts under $100,000, you can set up a plan online. This option is available if you don't already have an active plan for the same debt and can cover the amount within two years.

• Proposing a payment plan: For larger debts or more complex situations, you can propose a tailored payment plan. The ATO provides tools like the Payment Plan Estimator and Business Viability Assessment Tool to help you create a realistic proposal.

Remember, entering into a payment plan means committing to paying future tax obligations on time.

When proposing a payment plan, it's essential to accurately assess your capacity to pay. The ATO will require specific information depending on your business structure. This may include income sources, expenses, and cash flow information for the past three months.

It's important to note that the general interest charge (GIC) applies to unpaid tax debts. This rate is currently 11.38% per annum. The government has also recently announced plans to make GIC non-tax-deductible, which would increase the effective cost of unpaid tax debts.

The key to managing your tax debt successfully is proactive communication. If you're experiencing difficulties, don't wait for the ATO to contact you. Reach out to the ATO directly, or to your registered tax agent, as soon as possible. By engaging early and honestly, you can avoid more serious potential consequences like director penalty notices, garnishee notices or having your tax debt disclosed to credit reporting bureaus.

Our office will be closed over the Christmas period from Monday 23rd December 2024 and will re-open on Tuesday 7th January 2025. On behalf of the whole team of C W Stirling & Co., wish you a very happy Christmas and New Year!!!

If you need to know more about the items discussed here, please contact John Phillips or myself.

Kind regards,

Vikram G Jain, CA, FCPA
Director

Generating Ideas, Delivering Actions, Ensuring Results

Phone: +61 3 8539 4800 or +61 3 8613 8100 

Email vikramj@cwstirling.com.au : Website: www.cwstirling.com.au
Address: Level 2, 1 Southbank Boulevard, Southbank Vic 3006, AUSTRALIA.
Postal Address: GPO Box 4498, Melbourne Vic  3001

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