ATO Prioritising Support and Assistance

Throughout the pandemic, the Australia Taxation Office (ATO) provided support and assistance to businesses and individuals, including a temporary pause on debt recovery actions. A recent media release by the ATO highlights their continued preference to engage with taxpayers to find solutions to settling outstanding debts rather than penalise. The Deputy Commissioner has urged those with outstanding debts not to attempt to hide or ignore the issues they may be facing, rather, to face it head on and help the ATO address the issues.

Taxpayers who refuse to engage with the ATO can expect firmer action including:

• Garnishees;
• Recovery of director penalties;
• Disclosure of business tax debts; and
• Legal actions including summons, creditors petition, wind-up and insolvency action

At the time of writing, around 20,000 taxpayers are reported to have entered into payment plans or otherwise started paying their outstanding debts. The ATO has however, suggested insolvencies are likely to rise as the economy reaches normal tempo again.

In respect to taxpayers who are currently attempting to not engage with the ATO, the following steps will apply:

• Issuing intent to disclose notices and commence disclosing these to the Credit Reporting Bureaus and Creditor Watch
• In respect to companies ignoring outstanding debt obligations to the ATO they can expect to receive a Director Penalty Notice. Currently the ATO is issuing 30 to 40 Director Penalty Notices per day.

These initiatives focus on highlighting the importance of meeting tax obligations The ATO has stated that the above pathways all provide ways for taxpayers to re-engage with the ATO and avoid further penalty.

If you believe you are likely to receive a Director Penalty Notice, or otherwise have already, speak to Business Savers today to learn how we can assist with financial stress management.