Tax Focus – GST Debt

Taxpayers that are finding it difficult to meet their GST obligations on time should be contacting the ATO as early as possible.

The ATO are in the process of conducting a range of activities aimed at addressing debt including:

•           focusing on taxpayers who have a GST debt that is older than two years;

•           taking firmer action with businesses that are not viable; and

•           monitoring possible phoenix activity, such as the engineering of serial insolvencies.

The ATO will allow a business is suffering debt issues to enter into arrangements, allowing it to pay by instalments. It is essential however, that lodgements are made by the due date, even if it is not possible to make a payment by the due date.

Over recent years, the ATO have worked with taxpayers having difficulty paying a debt. The commercial approach has been effective, with the ATO working to understand a taxpayers individual circumstance, and assisting where a taxpayer is attempting to resolve the issue.

The ATO will take action against those who do not work with them to make arrangements, or who continue to avoid meeting their obligations. Some of these actions could include court action or a garnishee.