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ATO crackdown on tax debts!

Many of you may have seen an article in yesterday's Australian Financial Review
discussing the recent crackdown by the ATO on outstanding tax debts.

There appears to be no doubt that the ATO has toughened their stance on
outstanding tax debts.  Despite the generosity of the ATO with negotiating payment
arrangements during the so called 'GFC', there has recently been a spike in the
number of director penalty notices being issued by the ATO.

Director Penalty Notices make directors of a company personally liable for certain
tax debts of the company.  With many businesses yet to recover from the economic
slowdown, it is common for an entity to have overdue obligations with the ATO. 

With this in mind, we suggest the following:

1.   Do not bury your head in the sand: 
If you have outstanding commitments with the ATO, do not bury your head in the
sand.  Nothing seems to aggravate the ATO more than not responding or not
communicating with them about the outstanding debts.

2.  Keep on top of existing payment plans:
If you already have payment plans in place with the ATO, you must meet all
components of the agree payment plan.  This usually includes keeping up to date
with all future commitments in addition to the payment plan amounts.  If for
whatever reason you cannot meet the agreed payment plan amounts, talk to the
ATO in advance.  Do not default and give the ATO an excuse to issue director
penalty notices.

3. Consider your role as a director:
If you are a director of a company and you do not have a clear understanding of its
financial position, you need to consider your role as a director of that company.  
You should also consider whether any director appointments are surplus to your
needs. For example, you may not need to have both the husband and wife as
directors of your company.

4.  Confirm your outstanding ATO obligations:
As a director of any company you need to clearly understand the quantum of any
outstanding commitments to the ATO.  This includes the terms of any existing
payment arrangements, any additional amounts owing to the ATO and future
obligations that may arise from overdue lodgments.

5.  Get Help:
If you are in trouble and cannot meet your ATO commitments, get help from your
advisor.

If you have any questions, or would like to discuss your specific circumstances, please
do not hesitate to contact us.

 
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