The ATO are on the alert and are issuing notices such as Director Penalty Notices for unpaid GST, PAYG and Superannuation along with Statutory Demand Notices to begin wind up proceedings.
Why is early engagement so critical when dealing with tax debt?
Stop your difficulties from snowballing.
We often see clients who are drowning in debt.
Financial challenges and changing personal circumstances can translate to late lodgement and failure to comply with tax obligations. Issues snowball into a situation that puts jobs, businesses and houses at risk.
In these cases, there’s a substantial debt owing, and often the primary debt is compounded by interest and penalties that render it even more unmanageable.
Tax debt doesn’t need to get so complicated. Engaging with the right people early on makes all the difference.
We can’t avoid stress and the unexpected, but tackling problems straight away saves trouble in the long run. Seeking professional advice early on stops the debt from getting out of hand.
This is what happens without effective engagement.
When businesses fail to engage with the ATO/financial professionals and address tax debt, it causes complications.
Here’s what can happen when you avoid payment:
- The primary debt accrues interest charges and penalty fees, making it harder to repay
- Your future tax refunds can be offset against your tax debt
- The ATO may resort to pursuing the debt by imposing penalties or taking legal action
- You have fewer options for recovery, and the chances of losing your business increase
- You enter an unrealistic payment plan with the ATO and default
- A poorly executed remission of interest application is refused by the ATO
- You may become personally liable for business debt
- The debt is reported to a credit bureau, harming the credit rating, reputation and viability of the business
With substantial debt and compounding daily interest, it’s easy to see how business owners become overwhelmed and feel lost. There are still solutions, no matter how complex the situation has become.
The conversations you need to have.
At the first sign of trouble, get in touch with the ATO, your trusted financial advisors and tax debt specialists for assessment and support. Act fast to take stock of what you owe and your repayment/refinancing options.
Communicating and cooperating with the ATO shows them you’re trying. Make your lodgements on time, even when you can’t pay. Contact them when you fall behind to explain your situation and work with them to address the debt while it’s minimal.
If they see that you’re not deliberately avoiding payment or likely to engage in phoenix activities, they’re less likely to take stronger action to recover the debt.
If you need to arrange a payment plan, put your best foot forward by engaging an expert to do the talking for you. Avoid a refusal and secure an arrangement that leaves you room to breathe. When people rush into payment plans, it usually cripples their cash flow or doesn’t allow for living expenses. This makes it likely you’ll default and put yourself under unnecessary stress.
Pay it back faster by cutting back additional fees. Reduce general interest charges and penalties with an expert remission application. This decreases the amount owing to the ATO and makes debt repayment more manageable.
When discussing your debt with a professional, help them understand all the details. Don’t hold back on sharing the big picture, so they understand your situation. When they have all the relevant information, they can prepare a more effective application or plan that considers all your needs and results in the best outcome.
Get an expert in your corner.
Don’t delay those essential conversations and get the support you need to plan your way forward and repay your debt. The sooner you engage an expert, the less likely your tax debt will snowball out of control.
📩info@tdsau.com.au
📞1300 310 469🖥
www.tdsau.com.au