10 June 2016
Seek Help Early for Tax Debt - MySmallBusiness
By Kate Carnell
Picture a scenario whereby you arrive home one rainy day to discover a leak in your roof has left a small pool of water in your hallway. Thankfully it's only a small leak, so there's not too much damage to your ceiling and floor. The weather clears away overnight to a clear sunny day, so you decide to put-off fixing the roof to deal with what you think are much more pressing matters.
Fast forward to a few weeks later, and a big storm hits your suburb. That small leak has become a big problem. The ceiling has collapsed under the weight of the water, the carpet is ruined in the hallway and needs to be replaced, and some of your favourite furniture has been damaged. What would have been a relatively small repair job a fortnight ago has now turned into a very big, very expensive headache.
If only you'd have acted when you first discovered the leak; this could have all been avoided.
Tax debt management for small businesses is not unlike a leaking roof; many business owners experiencing financial difficulties put-off dealing with it, and instead of addressing the problem head-on, spend sleepless nights worrying about how to manage the situation, which left unresolved, only gets worse and puts businesses at severe risk.
Even the most efficiently run small business can run into difficulties due to unforeseen circumstances. For example, as we've seen recently, some owner-truck drivers have been struggling to deal with cash-flow problems following the implementation (and subsequent abolition) of the Road Safety Remuneration Tribunal's Payments Order.
Some dairy farmers too have been struggling financially as a result of falling milk prices. For these small business truckies and farmers – and those like them around the country – it's important they realise that there's help and support available to manage their tax debt.
Despite popular perceptions, the tax man is not the bogey man. The ATO does recognise that businesses can find themselves in financial difficulty due to challenging economic conditions or unexpected events, and is sympathetic to these situations.
To help small businesses manage their tax debt, the ATO can provide tailored assistance and payment plans – and reduced interest in some cases – to help small businesses meet their obligations in a way that takes their personal circumstances into account.
Something many may not also realise is that if you're a sole trader with a tax debt under $100,000, you can set up a payment plan by going directly to www.ato.gov.au/businessdebt and using the ATO's online service.
So, if you're lying awake at night worrying that you will miss your deadline and fall behind on your tax payments, contact the ATO as soon as possible; they will help you find a solution and in doing so, hopefully help you get a good night's sleep.
Just like the small leak in the roof that gets worse and worse the longer it's left unrepaired, don't let concerns about your tax debt become unmanageable – seek help early!
The ATO can be contacted on 13 28 66 or via their website: ato.gov.au/businessdebt