ATO debt relief for micro business
(16 June 2009 – Australia) The Australian Tax Office (ATO) has announced that it will provide assistance to micro businesses, including interest holidays, while also putting extra focus on identifying businesses that are cheating the system.
The ATO plans aim to provide for micro businesses that are doing it tough in the current environment, offsetting part of the extra costs involved for the ATO by ensuring that all businesses are claiming and paying what they should.
Michael D'Ascenzo, commissioner of taxation for the ATO unveiled plans to provide relief for businesses with annual sales of less than A$2 million, including a 12 month interest holiday.
D’Ascenzo said that currently there are around 706,000 micro businesses with a turnover under $2 million that have a tax debt. In total they owe the ATO $6.5 billion.
The ATO is now providing a 12 month general interest charge (GIC)-free payment arrangement for micro businesses struggling to meet their obligations.
This offer is available to all businesses with an annual turnover of less than $2 million who have an activity statement debt. Businesses in stress need to contact the ATO to utilise the offer.
The ATO will also provide a deferral of the payment due date on activity statement liabilities. While statements still need to be lodged on time, payers can receive up to two months deferral of the payment.
D’Ascenzo noted that the ATO’s experience has been that difficult financial times result in people taking more risks. This requires the ATO to be extremely vigilant in detecting possible abuse of Australia’s tax and superannuation system, he said.
The Federal Government is thus providing $70 million over four years to allow the early identification of small businesses not correctly recording and reporting cash income or participating in tax schemes and serial insolvency (phoenix) practices.
The measures put in place will give the ATO the opportunity to differentiate with greater accuracy between those businesses that will remain viable, if given reasonable latitude, and those that show little prospect of surviving the downturn, D’Ascenzo added.
Michael D'Ascenzo, commissioner of taxation for the ATO unveiled plans to provide relief for businesses with annual sales of less than A$2 million, including a 12 month interest holiday.
D’Ascenzo said that currently there are around 706,000 micro businesses with a turnover under $2 million that have a tax debt. In total they owe the ATO $6.5 billion.
The ATO is now providing a 12 month general interest charge (GIC)-free payment arrangement for micro businesses struggling to meet their obligations.
This offer is available to all businesses with an annual turnover of less than $2 million who have an activity statement debt. Businesses in stress need to contact the ATO to utilise the offer.
The ATO will also provide a deferral of the payment due date on activity statement liabilities. While statements still need to be lodged on time, payers can receive up to two months deferral of the payment.
D’Ascenzo noted that the ATO’s experience has been that difficult financial times result in people taking more risks. This requires the ATO to be extremely vigilant in detecting possible abuse of Australia’s tax and superannuation system, he said.
The Federal Government is thus providing $70 million over four years to allow the early identification of small businesses not correctly recording and reporting cash income or participating in tax schemes and serial insolvency (phoenix) practices.
The measures put in place will give the ATO the opportunity to differentiate with greater accuracy between those businesses that will remain viable, if given reasonable latitude, and those that show little prospect of surviving the downturn, D’Ascenzo added.
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