As the economy begins to emerge from the restrictions of the COVID-19 pandemic, the Australian Taxation Office (ATO) is starting to shift its focus back to firmer debt collection practices.
The ATO paused heavy collection activities for the majority of the last two years while individuals, businesses and the economy were grappling with the ongoing effects of lockdowns and border closures.
Now that these events are behind us, ATO Deputy Commissioner Vivek Chaudhary says the ATO is resuming debt collection activities while emphasising working with taxpayers to resolve their situation through engagement rather than enforcement.
"We have a range of support and assistance we can provide, and we can tailor a solution to a taxpayer's unique circumstances. What is critical is that taxpayers or their representatives talk to us and respond to our calls," Mr Chaudhary said.
"We understand that a lot of people - especially small businesses - have done it tough through COVID and may now have a tax debt. Our message is - don't stick your head in the sand - even if you can't pay the full amount owed straight away, please contact us or your registered tax professional to discuss, and we will work with you to set up an appropriate payment arrangement. We cannot help taxpayers who do not engage with us."
If you need help paying a tax debt, options are available. These options will vary depending on your circumstances and the type of debt you owe and include:
With a payment plan, you pay back your tax debt in weekly, fortnightly or monthly instalments until the debt is cleared.
Individuals, sole traders, businesses, and tax practitioners can sign up for a payment plan on behalf of their clients.
Eligible small businesses may be able to set up an interest-free payment plan to repay the tax debt within 12 months.
Your business must meet certain requirements, including an annual turnover of less than $2 million and have recent amounts owed from an activity statement of $50,000 or less overdue for no longer than 12 months.
You must also agree to make regular payments via direct debit.
You may be able to defer or amend your HELP debt or overseas levy if payments would cause you severe hardship or if there are other serious issues affecting you, such as a natural disaster, illness or death.
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