The Australian Tax Office has urged start-ups with tax troubles to contact them for assistance, in light of its tough new approach on tax debtors.
The move comes after the ATO revealed a 21% increase in the level of outstanding tax debt in the last financial year.
According to the ATO’s annual report, total collectable debt increased from $12.5 billion in 2008-09 to $14.7 billion in 2009-10.
The ATO has sent a warning to tax debtors that its so-called “emphatic approach” is about to end.
The report states: “The level of collectable debt… will need to be a focus area as the economy recovers.”
KPMG tax partner David Drummond told The Australian Financial Review he expects the crackdown to happen soon.
“In the context of the government’s etched-in-stone commitment to have the budget back in surplus within three years, it is difficult to foresee the ATO continuing its supportive accommodation of taxpayers who are having difficulty meeting their tax responsibilities as our economy continues to improve,” Drummond says.
An ATO spokesperson says start-ups shouldn’t hesitate to call the tax office for assistance.
“There are a number of ways we can help them. For example, flexible payment arrangements,” the spokesperson says.
“The ATO has a range of free ATO business assistance programs that can assist the business community with financial information.”
The ATO says start-ups should take advantage of the following:
