Tax Office Soften Their Approach

The Australian Taxation Office’s annual report published at the end of October 2012 suggests tax collections have increased by $28 billion or 10% on the previous financial year, however, unpaid tax debts jumped by $2.5 billion to $16.6 billion at the end of 2011/12.

This report suggests the ATO is making it easier for small totAX
medium sized businesses to pay back debts and meking it easier for small to medium size business to pay back debts and some 280,000 “businesses experiencing short term financial
difficulties” have entered into payment arrangements with the Tax Office over the past financial year.

This is more than double the 113,000 businesses who entered paymentarrangements last financial year. The payment arrangements in place at the and of June were worth $3.8 billion and of these 35,900 were interest‐free arrangements
for small businesses with tax debts worth $688 million.

The ATO has characterised the surge in payment arrangements as part of its more understanding approach to businesses struggling to pay debts since the global financial crisis. The annual report also revealed:

• The ATO raised $11.4 billion in “active compliance liabilities” targeting tax evaders through audits, risk reviews, investigations and voluntary disclosure campaigns.

• 85,000 businesses were helped via the ATO’s Small Business Assistance Program.

• Over 539 million transactions received from third parties were matched to support a range of compliance and service activities, such as pre‐filling of tax returns.

• Due to higher compliance activities, the number of objections and reviews completed in the past financial year increased to 33,272, up from 24,255 in the previous year.

If you are concerned about an unpaid tax debt we urge you to contact us immediately to discuss your options. We believe a pro‐active approach with the ATO will be produce a much better result and the GFC has certainly seen the ATO adopt a more empathetic approach.

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