DAYS OF ATO PLAYING BANKER TO SMALL BUSINESS ARE NUMBERED
Chartered Accountants ANZ (CA ANZ) believes small businesses could be in for some unforeseen pain following changes to tax collection methods made by the Federal Government as part of the MYEFO announcement.
“With more than $95 billion in tax debt to collect, it is not surprising that attention is being given to the collection of that debt,” said CA ANZ Senior Tax Advocate, Susan Franks CA.
“The ATO has announced that it will be tightening the ability of taxpayers to access payment plans.
“Taxpayers will now need to prove they have capacity to pay the tax debt and an emphasis will be on paying the tax debt as early as possible.
“Small businesses can have difficulty accessing finance from traditional financial service providers. With the general interest charge approximating the small business interest rate charged by banks, small businesses have found it easier to apply for finance in the form of a payment plan with the ATO than a loan from a bank. This is evidenced by small business owing most of the outstanding collectible debt.
“Denying deductibility of the general interest charge will effectively increase the cost of accessing finance with the ATO and make obtaining external finance more attractive.
“The days of the ATO being the banker for small business are numbered.
“Small businesses should talk to their Chartered Accountant about their cash flow and financing to ensure that they can pay their tax on time,” Ms Franks said.
(For more detail on Denying deductions for ATO interest charges refer to page 192-193 of the Mid-Year Economic and Fiscal Outlook 2023-24)
ENDS
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Gillian Bowen
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