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ATO looking to recover debts: Talk to us about payment plans Posted on March 31, 2023
The ATO’s debt recovery activity and economic headwinds have combined to hit NSW hardest with insolvency appointments up 62 per cent in the first half of 2022-23, Insolvency Australia says.
This is particularly concerning for small business in the current climate of interest rate rises, inflation and resourcing.
A reinvigorated tax office resulted in NSW suffering almost as many insolvencies over six months, 2,153, as the entire previous year when there were 2,402.
The ATO has come down harder on those with tax debt, resulting in increasing external administration.
Since the beginning of the year, the ATO has issued 80,000 warning letters to directors as it ramps up its debt recovery program.
We have had many conversations with Insolvency practioners in the first 3 months and the ATO seem to have again stepped up recovery efforts in 2023 with high levels of winding up filings and statutory demands popping up, sometimes also accompanied by a DPN.
What can you do?
There are 3 main strategies to employ.
- Ensure your lodgements are up to date – use XERO or MYOB online or a solution that streamlines the processing of your accounting.
In some cases, the failure to lodge (even if you cant pay immediately) can result in you becoming personally liable for the debt.
- Don’t ignore it – act early!
Be aware of the debt, the size of it and the ATO’s position with your account.
- Work with your accountant – get advice.
The ATO has prescriptive guidelines on how it will accept payment plans, the content you must include.
A review of the business including upcoming cashflow, workflow and costs is a great way to begin the review process.
From here, we can work with you to come up with a plan for the ATO including interest remission.
If you need more advice, email the Director of our Business Advisory team, [email protected]