The Australian Tax Office has urged start-ups with tax troubles to contact them for assistance, in light of its tough new approach on tax debtors.
The move comes after the ATO revealed a 21% increase in the level of outstanding tax debt in the last financial year.
According to the ATO’s annual report, total collectable debt increased from $12.5 billion in 2008-09 to $14.7 billion in 2009-10.
The ATO has sent a warning to tax debtors that its so-called “emphatic approach” is about to end.
The report states: “The level of collectable debt… will need to be a focus area as the economy recovers.”
KPMG tax partner David Drummond told The Australian Financial Review he expects the crackdown to happen soon.
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“In the context of the government’s etched-in-stone commitment to have the budget back in surplus within three years, it is difficult to foresee the ATO continuing its supportive accommodation of taxpayers who are having difficulty meeting their tax responsibilities as our economy continues to improve,” Drummond says.
An ATO spokesperson says start-ups shouldn’t hesitate to call the tax office for assistance.
“There are a number of ways we can help them. For example, flexible payment arrangements,” the spokesperson says.
“The ATO has a range of free ATO business assistance programs that can assist the business community with financial information.”
The ATO says start-ups should take advantage of the following:
- Business Assistance Visits, tailored to the needs of individual businesses. These visits are usually conducted at the business address and are covered by the Commissioner’s Guarantee, which means information is confidential and will not be used for any other purpose.
- Tax Basics Seminars, available to small business. Seminars cover topics including before you start business, once you commence your business, operating your business, your first BAS statement, and your end of year statement.
- Record-keeping workshops. These include record keeping tips as well as some business survival tips and traps such as budgeting.
- Small business benchmarks. The ATO has released more than 100 Small Business Benchmarks, designed to help business meet their tax obligations through enabling them to track their performance against the rest of their industry.