The current coronavirus pandemic has had a profound impact on businesses and employment across Australia. Understandably, with the unemployment rate at an all-time high and with business suffering huge declines in revenue, many may not be able to keep up with their financial obligations.
The ATO imposes interest and penalties on late payments of tax debts. However, the ATO has implemented support measures to ease the burden of taxpayers in view of the current economic situation (Covid-19 Measures). One of the measures implemented is the remission or waiver of interest and penalties imposed on late payments of tax debts.
To know whether you are eligible for this support, you have to first determine whether the interests and penalties were imposed on you or you business on or after 23 January 2020.
General Interest Charge and Penalties Incurred On Or After 23 January 2020
If the interests and penalties were imposed on or after 23 January 2020, the Covid-19 Measures will apply, and any interest and penalties will generally be remitted or waived. You will need to contact the ATO, however, to arrange for this to occur.
General Interest Charges and Penalties Incurred Before 23 January 2020
If the interest and penalties were incurred before 23 January 2020, the Covid-19 Measures waiver will not apply to you or your business. You may however, be eligible for a low interest payment plan, where interest is suspended moving forward, while a payment arrangement is in place.
This does not mean that you will not be able to obtain a waiver of pre 23 January 2020 interest and penalties, it will just be more difficult.
Our experienced accountants can assist in reviewing your financial situation and in negotiating a payment arrangement with the ATO on your behalf. Depending on your circumstances, we may even be able to negotiate a remission of pre 23 January 2020 interest and penalties.
We have successfully negotiated numerous remissions of interests and penalties for our clients in the past. And this is just one of those examples where the ATO remitted approximately $114,000 of interest and penalties incurred (prior to 23 January 2020).
Existing Payment Arrangements
If you or your business has an existing payment arrangement and you are no longer able to maintain the arrangement, there are options as well under the Covid-19 Measures. This can include a suspension of interest charges and penalties while a payment arrangement is in place. It can also include renegotiating an existing payment arrangement for a lower repayment amount to ensure sustainability of your cashflow. We have successfully helped numerous clients with this including this example where a significantly reduced payment arrangement was renegotiated.
Contact us for Assistance
If you need to negotiate a payment arrangement with the ATO, or if you or your business are having difficulties paying tax debts, the professionals at TAX DEBT SOLVED can help. Contact us for a free, no-obligation consultation today.