It is not surprising that the last few years have been extremely difficult for many businesses and people due to the Covid-19 pandemic (lockdowns, mask wearing and also the considerable disruption for your business). Therefore it is totally understandable that many organisations and individuals may have fallen behind on meeting their tax obligations. However, with the severe impacts of Covid-19 finally diminishing we are now seeing that the Australian Tax Office (“the ATO”) is taking steps to start recovering the many billions of dollars in tax debt.

Our Top Tips with negotiating with the ATO

1. Start early

The ATO is committed to resolving disputes early and to that end will explore all means necessary to achieve that outcome. If a tax debtor takes the initiative or to use the cricket analogy “get on the front foot” to address the taxation debt, you will find that there is a much better outcome than when you ignore your obligations and wait for the ATO to take action (which can often be swift).

2. Open and transparent communication

The ATO encourages people and companies to contact them to discuss options available for resolving a taxation debt. When there is ongoing, open communication between the tax debtor and the ATO there is the strong possibility that there will be efficient outcome for all concerned.

3. Make sure your records are up to date

Before contacting the ATO in relation to a taxation debt, the tax debtor should review their records and ensure everything is up to date including any outstanding lodgements for the ATO, as well as its own financial records. Obviously, we can contact them on your behalf.

It has been our experience that a payment arrangement is less likely to be considered unless all lodgements are up to date and the ATO will likely want to ensure what is being offered is not only able to be complied with but also that you have the capacity to meet that payment arrangement.

4. Beware of your options

All tax debts are payable in full when due. However, the ATO will consider assisting you in discharging your taxation debts and has the power to consider the following:
– that they consider reducing your debt by a remission of the general interest charge (this can often be a substantial amount that can be reduced);
– Entering into payment arrangements;
– Deferring the time for payment;
– In limited circumstances apply for a release of your tax debt (you cannot be released from GST, PAYG withholding or Superannuation for your staff.); and
– Accepting a settlement offer

5. Make sure or attempt not to pay other debts at the expense of the ATO

If the ATO sees other creditors as being paid in priority they will be less likely to be lenient to you.

Key Takeaway

If your tax debt is out of control or has the possibility to become out of control, you may need to investigate a restructure.

Here the team at Ryan Murdoch O’Regan can assist you with the most effective options to reshape your business (or your individual situation) so your creditors are satisfied and you can continue to operate and hopefully flourish and prosper.

Contact Us

Get the best representation. Contact our expert commercial litigation lawyers on 1800 999 529, email mail@rmold.newwebsite.live or submit an enquiry below.

We are available to meet with you at any of our local offices (Brisbane, Gold Coast, Beenleigh, Cleveland and Jimboomba) or by telephone or video-conference.

This article is for your information and interest only. It is not intended to be comprehensive, and it does not constitute and must not be relied on as legal advice. You must seek specific advice tailored to your circumstances.