Managing tax debts
Managing tax debts and negotiating with the ATO requires knowledge and familiarity with ATO requirements.
We are experienced in managing tax debt and negotiating payment plans. Negotiating a payment plan with the ATO can relieve a lot of pressure and stress. We can help, and there is no need for you to deal with the ATO, let us do it for you.
P.S. we are pretty fantastic at applying to get your interest and penalties refunded too!
Did you know, eligible small businesses can get interest free payment plans for Activity Statement Debt?
Underlying Cash flow Problems… we can help?
If you have been experiencing cash flow shortages and more often than not struggling to find the money to pay your Activity Statements and Tax Bills we can help you. We can put together a package for you to get back in control of your business. A strategy could look like:
Step 1: Personal Budget lets assess (warts and all!) the owners spending patterns and work out how much profit and cash flow the business needs to make to firstly, make ends meet, and secondly what do we have to do to achieve the lifestyle you want.
Step 2: What are the financial commitments of your business? Such as what are the monthly equipment repayments, loan repayments, ATO payment arrangements etc. Can you manage these better, save some money on interest, or change the timing of the payments to better suit your business? Do we need to renegotiate payment plans?
Step 3: What are your business expenses (including income tax)? How much and what for?
Step 4: What are your employment costs, how productive are your employees? Are you over or under staffed?
Step 5: Calculate your sales target, how much do you need in sales to pay your financial commitments, expenses, wages, and tax and have a fantastic lifestyle. Is this achievable? Do you need get more sales?
Step 6: Put it all together and this becomes your cash flow budget. We train and educate you on how to use it and monitor your own business.
Step 7: Monitor it. We set up a very easy understand monthly monitoring system and quarterly snap shot of your business.
Call us today on 07 55263888, we want to help you.
Information – ATO Powers and Directors Personal Risk with the ATO
The ATO is a creditor (that is just like a supplier you owe money to). Except the ATO have more powers to collect outstanding debts than a normal creditor does. Its important you understand some of what the ATO can do if you do not manage your tax.
Directors Penalty Notices
At a glance directors of a company can be made personally liable for a companys unpaid PAYG Withholding and Superannuation.
Non-lockdown Director Penalty Notices
The first type is the non-lockdown directors penalty notice. Non-lockdown notices are issued to company directors that have lodged its business activity statements, instalment activity statements and SGC (Super Guarantee Charge Statements for overdue super) within three months of the due date, but the PAYG withholding and Superannuation debts remain unpaid. The notice gives directors 21 days to take action.
Lockdown Director Penalty Notices
The second type is lockdown directors penalty notice. Lockdown notices are issued to company directors where a company has failed to lodge its business activity statements or instalment activity statements within three months of their lodgment date. In this case, directors become automatically liable for the unpaid PAYG withholding and Superannuation debts to the ATO.
Lodge those Activity Statements on time, or at least within three months of the due date, or the director(s) will automatically be liable for unpaid PAYG withholding. Even if you cannot pay it, we can help you negotiate a payment arrangement and work on a business improvement strategy.
Unpaid or overdue superannuation? Lodge a Superannuation Guarantee Charge Form.
The ATO can issue a garnishee notice to a person or business that holds money for you, or may hold money for you in the future. The garnishee notice requires them to make payments directly to the ATO to reduce your debt.
For individuals, the ATO may issue a garnishee notice to:
- Your employer or contractor
- banks, financial institutions and building societies where you have accounts
- people who owe money to you from the sale of real estate, such as purchasers, real estate agents and solicitors.
For businesses, the ATO may issue a garnishee notice to your financial institution, trade debtors and suppliers of merchant card facilities.
The ATO can issue a statutory demand for payment to a company that has not paid its tax debts. A statutory demand requires the company to pay the entire debt or enter into a payment arrangement with them within 21 days.
If a company doesn’t comply with the statutory demand, the ATO may use the non-payment as evidence that the company is insolvent and apply to the Federal Court to wind up the company.
When a court orders a company to be wound up, an official liquidator is appointed to sell the company’s assets and distribute the resulting funds to the company’s creditors.
The ATO can take action to wind up a company if it has failed to pay its debts and you have not been able to make a suitable payment arrangement with the ATO.
Claim or summons
The ATO may file a claim or summons with the relevant court of your state or territory. Once the court has recognised that the debt is owed, the ATO may execute on the judgment debt in a number of ways, including by filing and serving a bankruptcy notice.