Businesses are being forewarned that the ATO will be resuming debt recovery and compliance in the wake of Jobkeeper ending in March 2021, in a bid to start to recover the over $1.3B shortfall in tax compliance revenue target this year.

The ATO halted debt collection – and charging penalties on new debt – at the height of COVID, redeploying its staff for stimulus measures such as JobKeeper. 

But the Tax Office has now said it will resume pursuing and enforcing debt recovery action and that “From the end of March 202… the imposition of penalties will resume,” an ATO spokesperson told Accountants Daily.

As of the end of March, penalties resumed

At Tax Assure, we have already been seeing increased contact from the ATO with clients, with all signs pointing towards stronger enforcement and debt recovery actions to come.

The ATO told us directly last month that “collection activities are being rolled out in phases” and that they had already commenced re-engagement with businesses that have tax debt and/or outstanding lodgements. 

With this updated information from the ATO, it seems they are moving into a new phase of resuming active debt collection.

“As of the end of March, penalties will resume “where appropriate”, says the spokesperson, and the tax office will take debt and lodgement compliance actions “on a case-by-case basis”.

But with many Aussie businesses still very much in recovery mode and struggling with cash flow, a lump sum payment right now is just not an option.

However, no matter how tight things are right now, it is so important to get onto the front foot with the ATO sooner rather than later. We’ve been told that they will continue to be supportive of businesses who are responsive, and who have Tax Assure engaging on their behalf.

How Tax Assure can help with your business tax debt

And luckily, there are ways we can assist you to address and manage tax debt that doesn’t need to be a disaster for your cash flow. We can help you stay solvent and viable, even if you have tax debt that’s keeping you up at night.

At Tax Assure we help in several ways:

1. Putting a hold on any imminent ATO action. This removes immediate pressure, giving us time to review options with you and construct a viable plan – one that will be acceptable to the ATO and manageable for you.
2. Working directly with the ATO and their case officers in the various debt-related departments to negotiate and agree on that plan on your behalf.
3. If you already have a tax debt payment plan in place, we can often negotiate better terms that match your cash flow more effectively.
4. Creating the strongest case for a refund of penalties and interest. If you’ve ever had tax debt, the ATO has imposed interest and penalty charges; we are experts in getting those amounts refunded – whether they current or historical charges.

If you have tax debt please reach out to us for a chat about your options. We’d love to help you get that resolved so you can get you back to where you should be… in business!