John Durie: Small business ‘can’t avoid commitments’ as ATO works through backlog of arrears
Small businesses are being warned to pay attention to their tax obligations and if in trouble, to speak up early to set repayment plans with the ATO.
Small businesses are being warned to pay attention to their tax obligations and if in trouble, to speak up early to set repayment plans with the Australian Taxation Office (ATO), according to Michael Brereton, the president of the Australian Restructuring Insolvency and Turnaround Association.
Brereton, who is also a director at William Buck, says COVID-19 saw a lot of money pumped into the economy, while the ATO and other creditors stopped pursuing claims.
This changed in the middle of this year, according to Brereton, with the ATO now working through a backlog of arrears. “Small business can’t sit there and avoid commitments,” he told SmartCompany.
Brereton will feature in a session on “big issues for small business” at the annual Australian Securities and Investments Commission (ASIC) forum, which is happening in Sydney this week.
COSBOA chief executive Alexi Boyd will also feature at the forum, along with Australian Small Business and Family Enterprise Ombudsman Bruce Billson.
Boyd will tell the session “governments can help to get small business out in front” of the myriad issues before them.
Rising energy costs, interest rate hikes and a slowing economy confront the sector and Boyd told SmartCompany that too often, governments are reactive.
“Many small businesses are trying to get the time back that COVID-19 stole,” she said.
Investment in the future is crucial for small business to help stay ahead of the curve.
Governments can do more: Boyd
This year’s forum is one of the first at ASIC to focus on small business issues and Boyd says “it’s positive ASIC is putting the issues on the table”.
“Small business is bogged down with issues like worker shortages, supply chain disruptions which confront larger companies but without the HR team and lawyers to help them deal with the problems,” Boyd said.
“It doesn’t have the time to see ahead and when it does, it is confronted with red tape and other hurdles,” she added.
The previous government made a number of changes to insolvency laws during COVID-19, some of which have now lapsed, such as the safe harbour for directors on insolvent trading.
Insolvency rates in Australia have halved in recent years, in part because of the fiscal support and legislative changes, but Brereton warns “they are just starting to increase and there is a long backlog”.
“Governments can always do more in dealing with the structural issues facing small business,” Boyd said.
“There are also mental issues affecting the sector more than most.”
It is also crucial for small businesses to seek the right advice to help them through some issues like restructuring, she adds.
The ASIC forum is an annual event aimed at improving dialogue between the corporate cop and the business community.
