A stitch in time saves nine. Chances are you’ve heard this expression bandied about from time to time. The sentiment is easy to understand; don’t keep putting off small obligations until they become large problems that are too big to ignore. Seems like pretty basic common sense, right? So why do so many of us bury our heads in the sand and make things worse for ourselves, particularly when it comes to dealing with the ATO?
In the current economic environment, more and more businesses are having difficulty with financial management and meeting their commitments with the ATO. There is also a misconception that the ATO is hard to deal with, which often leads people to avoid contacting them. This is not the case. Overall, the ATO is willing to help businesses meet their obligations when times are tough. Avoiding them will only make sorting out the problem more difficult, so the best thing to do is work with them. Acuro has plenty of experience in financial management and helping businesses deal with the ATO. Below are some simple steps that we recommend you follow:
- Always make sure the lodgement of all returns is done on time. The ATO will fine you for late lodgement so if you are having difficulties lodging the relevant return then don’t hesitate to ring the ATO and request an extension.
- Once lodgement of a return is done and you have incurred a debt with the ATO they will send you a letter usually within 30 days requesting payment. You should use this period to look at your cashflow and work out how you are going to pay the outstanding amount. We specialise in restructuring cashflow and can help you with this step.
- Once you receive the letter you need to ring them and negotiate a plan to repay the debt. The ATO will usually give you a maximum of 12 months to pay back the outstanding amount. Be aware that once you lock into an agreement with them you cannot be late with any lodgement or payment while the agreement is in place. If you are late the agreement will be cancelled and you will have to pay the outstanding amount in full. It is therefore very important that you have a cashflow plan in place before locking into any agreement.
- If you are having difficulties meeting the payments on an agreement please ensure you ring and discuss the difficulties with them before you default on the arrangement. In general they will try and help if you notify them of difficulties in advance.
If you found the above advice useful, but still want further information or help in dealing with the ATO, contact brett@acuro.com.au
