LATEST ACCOUNTING NEWS
Tax Time Checklists - Individuals; Company; Trust; Partnership; and Super Funds
Compare your business
2024 Year End Tax Planning Guide (Part 2)
ATO to crack down on rental income, WFH deductions this tax time
How to Draft a Standard Form Contract
GST, PAYG withholding a ‘significant portion’ of $50bn tax debt
ATO changes will make it harder for over 42,000 small businesses.
The Deadliest pandemics in History
Budget breakdown – Federal Government Analysis
Winners & Losers
Federal Budget 2024
2024 Year End Tax Planning Guide (Part 1)
Medicare levy surcharge OR basic health insurance ?
ATO warns of ‘serious penalties’ for unlawful tax scheme promoters
ACCC scam report
Employees taking more sick days - and it's getting worse
Foreign residents selling property in Australia
How much does negative gearing really cost – an overview and an opinion?
The Shortest-reigning Monarchs in History
FBT Reminder – Odometer Reading
ATO’s debts on hold campaign prompts new IGTO guidance
A comprehensive collection of small business benchmarks
The 2025 Financial Year tax & super changes you need to know!
Underperforming employees: When can you terminate?
A comprehensive list of guides to industry specific tax deductions.
‘Renewed concerns’ about economy sees consumer sentiment dip: Westpac
Oldest Buildings in the World.
Small businesses may ‘collapse under strain of payday super’, IPA warns
ATO’s hands tied with scrapping on-hold debts, expert says
What Drives Your Business Growth and Profits?
Australian Taxation Office (ATO) shifting to firmer debt collection activity
Vimeo test
Quarter 1 January - March 2024
Quarter 4 October - December 2023
Quarter 3 July - September 2023
Quarter 2 April - June 2023
Quarter 1 January - March 2023
Quarter 4 October - December 2022
Quarter 3 July - September 2022
Quarter 2 April - June 2022
Quarter 1 January - March 2022
Quarter 4 October - December 2021
Quarter 3 July - September 2021
Quarter 2 April - June 2021
Quarter 1 January - March 2021
Quarter 4 October - December 2020
Quarter 3 July - September 2020
Quarter 2 April - June 2020
Quarter 1 January - March 2020
Quarter 4 October - December 2019
Quarter 3 July - September 2019
Quarter 2 April - June 2019
Quarter 1 January - March 2019
Quarter 4 October - December 2018
Quarter 3 July - September 2018
Quarter 2 April - June 2018
Quarter 1 January - March 2018
Quarter 4 October - December 2017
Quarter 3 July - September 2017
Quarter 2 April - June 2017
Quarter 1 January - March 2017
Quarter 4 October - December 2016
Quarter 3 July - September 2016
Quarter 2 April - June 2016
Quarter 1 January - March 2016
Quarter 4 October - December 2015
Quarter 3 July - September 2015
Quarter 2 April - June 2015
Quarter 1 January - March 2015
Quarter 4 October - December 2014
GST, PAYG withholding a ‘significant portion’ of $50bn tax debt

Small businesses are increasingly falling behind on debts, with two-thirds of all debt owed by small business, the ATO warns.



.


In a recent address, ATO Tax Commissioner Rob Heferen stressed the importance of small business owners meeting their obligations, with small business debts to the ATO continuing to climb. 


The Tax Office is currently chasing over $50 billion in collectable debt, with 65 per cent of all collectable debt owed relating to small business, said Heferen, speaking at the Council of Small Business Organisations Australia (COSBOA) summit.


Of the collectable debt owed by small business, around three-quarters or 74 per cent relates to activity statements.


 

"This means a significant portion of the amount going unpaid is GST collected from consumers or PAYG withholding, withheld from employees pay," said Heferen.


"We are seeing an increasing number of businesses fall behind on these types of payments, from which point it is very difficult for businesses to get back on top of their obligations and remain viable."


The freshly minted commissioner told the COSBOA summit that ensuring taxpayers pay their tax and super obligations will remain a key focus for the ATO.


 

In September of last year, deputy commissioner Vivek Chaudhary said the ATO’s collectable business debt had nearly doubled over the last four years. In June 2019, taxpayers owed $26.5 billion while, at the time of his speaking, the debt had climbed to $50.2 billion.


These amounts only reflect debt owed by businesses, though they make up 90 per cent of all collectable debt. Chaudhary called the growth “concerning” and “unsustainable.”


 

“Too many businesses have accumulated unsustainable levels of debt. We want to guard against our payment culture turning from consistently paying on time to paying late,” he said.


Chaudhary said late payment creates an unlevel business playing field, and this idea was echoed in Heferen’s Thursday address.


“Many of your members are telling us how concerned they are about the unfair competitive advantage businesses not complying with ATO obligations are getting over those who are doing the right thing,” said Heferen.


“There’s also a significant risk of businesses trading whilst insolvent and creating a situation where all creditors – including suppliers and employees miss out on what they are owed.”


Lessons from debts on hold


Heferen also told conference attendees that the ATO last year learned the “very hard lesson” that its ability to waive taxpayer debt was very narrow.


Though he did not go into details, Heferen was likely referring to the Australian National Audit Office’s disapproving review of the agency’s approach to debts on hold.


Where recovery of a debt does not make economic sense, typically because it is for an insignificant amount, the ATO will often put the debt collection on hold.


The ATO began advising taxpayers that it would be offsetting the debts against returns or credits last year after the ANAO raised concerns with the ATO's previous practices for the debts following the end of the pandemic.


The awareness campaign was later paused following concerns raised by the community.


The Taxation Ombudsman this week called for the ATO to wipe interest from the approximately $15 billion the ATO said it was actively looking to claw back with these debts.


On Tuesday afternoon, Karen Payne told ABC Drive the ATO was right to collect the debts, but that it should “have regard to the circumstances in which the debt … has been raised and communicated to taxpayers.”


“If the debt is very old and you haven’t been advising taxpayers that it exists, then it would seem fair to me that any interest component should be remitted,” added Payne.


 


 


 


Nick Wilson
05 April 2024 
accountantsdaily.com.au




15th-June-2024
 
CPA logo Peter I Price & Associates Pty Ltd
Phone: (07) 3376 3411| Email: info@peterprice.com.au
15 Loffs Road, Mt Ommaney QLD 4074
Liability limited by a scheme approved under Professional Standards Legislation.