Have you or your company got a large tax debt?
Do you want to get the debt reduced?
Well, now is the best time to ask the ATO to reduce your tax debt.
The ATO can reduce or waive completely, interest and penalties included in a tax debt. However, they will nearly always refuse to waive a core tax debt. But, whilst the ATO won’t waive a core tax debt, many people and companies who contact us have substantial amounts of interest and penalties included in their tax debts. And getting these amounts reduced or waived, can help you pay a debt which can seem unmanageable.
What is the ATO’s current approach to debt recovery?
At the moment the ATO is taking very limited action to recover debts it is owed. For example, the ATO would ordinarily make 1,500 to 2,000 applications to Court each year to have companies placed in liquidation. However, from April 2020 to June 2021 the ATO made a TOTAL of 7 such applications. The ATO has also significantly reduced the number of Director Penalty Notices and Garnishee Notices they have issued.
The time is right to ask the ATO for help
The ATO is also being very lenient in:
- Agreeing to reduce interest and penalties included in tax debts; and
- Entering into payment arrangements, including long term arrangements.
If you are seeking this relief you are more likely to be successful if your debt is Covid-19 related. However, the ATO is also taking a softly, softly approach for taxpayers who have historical tax debts including waiving interest and penalties and agreeing to payment arrangements for older tax debts.
So what should you do?
The best thing to do is to seek to negotiate a payment arrangement including a reduction in interest and penalties now. The ATO’s approach to debt recovery will change at some stage and it is better to take advantage of the relief being offered now. The other option is to wait until the ATO is taking a more hard line approach, which could mean your proposal is rejected.
We can help
If your company is having difficulty paying its tax debts, then you should urgently get professional advice about what you should and can do. This can help avoid the type of situation in this article. And TAX DEBT SOLVED can help. So, please contact us for a free, no-obligation consultation, here.