Australian Taxation Office commissioner Michael D’Ascenzo has announced new measures to help small businesses earning less than $2 million in revenue get through the downturn at a small business summit in Melbourne this morning. D’Ascenzo announced that businesses earning under $2 million and have a tax debt will be entitled to apply to have interest charges waived for 12 months and also to request deferred payment dates for activity statements.
“While most small businesses are meeting their tax obligations, global conditions are having an impact, with over a quarter of small businesses carrying a tax debt,” D’Ascenzo said at the Council of Small Business Organisations of Australia small business summit today.
“We’ve introduced the general interest charge free payment arrangements and deferred activity statement payment due dates to help those small businesses that are struggling to meet their tax obligations.”
D’Ascenzo said that the ATO wants to avoid having businesses fail due to temporary cash problems, and that businesses must contact the ATO as early as possible to negotiate arrangements.
“Again businesses need to contact us as soon as possible to request an extension of up to two months in some cases. We would expect businesses to reciprocate the goodwill shown by working with us to meet their civic responsibilities.”
Scott McGill, partner at Pitcher Partners, says the announcements are timely considering business activity is expected to drop, and the effects of the Government’s stimulus packages are beginning to fade.
“The ATO has said publically now that their intention is not to wind businesses up, and they don’t want to see businesses fail. Giving the 12 month relief on GIC assists with that, because often that’s the difference between getting back on your feet and not. It can mount up quite quickly.”
McGill says the announcements are good, but that they depend on the company being able to meet their tax obligations and that if a business is beyond repair, it won’t help them.
“If you’re insolvent, you’re insolvent. It’s also worth noting that small businesses may not normally know about these sorts of things, so the fact an announcement has been made is a good thing and will help small businesses … who are struggling right now.”
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
