Stricter ATO Policies on Tax & Super Debt: What You Need to Know
The ATO has confirmed it is changing its approach to collecting unpaid tax and superannuation
debts.
Their new strategy aims to act more firmly and swiftly regarding outstanding obligations, making it essential for business owners to stay
informed and take proactive steps.
What’s New from the ATO?
Here are some key points from the recent ATO update:
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Early Engagement: The ATO is shifting to an earlier engagement model. They will start reaching out as soon as they detect
signs of financial distress or non-payment. This proactive approach is designed to resolve issues before they escalate into larger debts.
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New Payment Plans: For those facing temporary financial difficulties, the ATO is introducing tailored payment plans that
take into account specific circumstances while still prioritising timely debt resolution.
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Enhanced Digital Support: The ATO is improving its digital services to help businesses understand their obligations and
manage payments more effectively. This includes the ability to set up direct debit arrangements and access new tools to track due dates and
outstanding amounts.
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Serious Consequences for Non-Compliance: Businesses that persistently fail to meet their tax and super obligations can
expect more severe recovery actions. This includes garnishee notices and, if necessary, legal action. Continuous non-compliance may also
lead to being reported to credit agencies.
Why Being Proactive Matters
Taking a proactive approach to tax and super obligations is crucial for business success. Engaging early with your accountant can help you
navigate these changes effectively and avoid potential issues down the line. By staying ahead of your obligations, you can mitigate the risk
of penalties, ensure compliance, and maintain a positive relationship with the ATO.
Not paying tax impacts not only your business but also the wider community. The ATO is focused on preventing businesses from putting other
small enterprises and employees at risk. Acting early enables you to get back on track and sustainably manage your finances.
What Can You Do?
Here are a few steps you can take in light of the ATO’s revised approach:
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If You Can Pay: Prioritise your tax and super obligations. Paying on time can prevent interest accrual and firmer
collection actions from the ATO.
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If You’re Facing Hardship: If you are unable to pay in full and on time, explore available options, including setting up
payment plans. If your debt is less than $200,000, you can establish a plan online through the online services for business.
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For Genuine Financial Hardship: If you are experiencing genuine financial hardship, additional options may be available,
such as deferring payment due dates and interest remissions.
Final Thoughts
The key takeaway is clear: if you can pay, you should do so. If you need more time, do not ignore your obligations—acting early to set up a
payment plan or seeking assistance is essential. Engaging with your accountant can make all the difference in navigating these changes
successfully.
For the full details on the ATO’s revised approach, check out the official ATO link here: We're
changing our approach to collecting unpaid tax and super.
How can we help?
We provide business advisory services including cash flow planning to our business owner clients.
Let’s work together to ensure you stay informed and compliant during these changes. If you have any questions or need further assistance,
feel free to reach out.
Further Information
Contact Jenna Lawes of this office on 0418 303 323.
