The post-pandemic landscape reveals gross debt increasing from $534.4 billion to $894.9 billion between 2019 and 2022, with about $5 billion in debt incurred by businesses missing their tax obligations.
So, how will the Australian Taxation Office respond to these rising figures, and what could this mean for your business? Follow the full story here.
Why is the ATO Closing So Many Businesses?
The ATO is ramping up its efforts to reclaim lost finances through missed or late tax payments and superannuation contributions, with news reports declaring 9,000 businesses this month alone could be at risk of closure.
During the pandemic, the ATO focused on tax cuts and stimulus payments–support from the government using taxpayer money–rather than collecting debt.
Limited allowances mark the end of flexibilities provided during the pandemic, supporting businesses that couldn’t meet their financial obligations. However, with more than $100,000 due in October, the ATO is taking action now.
It’s looking to reinstate fairness across all businesses, ensuring they lodge tax returns and make payments on time. For clarity, here are several dates you should know about:
- 31st October: Tax return deadline for the previous financial year
- 30th June: End of the financial year
- 1st July: Start of the new financial year
- 14th July: Lodge pay-as-you-go (PAYG) reports, excluding reports made through single-touch payroll (STP) systems
- 15th January: Business deadline for income tax for entities that incurred more than $10 million in profit
Tip: Lodge before the 15th January on 31st October if you have a record of submitting late files.
What Should You Do If Your Business Owes Money?
If you’ve missed tax payments, lost track of reporting, or haven’t engaged with the ATO over recent months, you may have received several communication attempts from the Office proposing ways to get on top of your debts. As of July 2023, the ATO has issued “intent to disclose” notices to over 22,000 businesses.
If you’ve received one of these notices, you’ll have 28 days from the issue date to engage with the ATO about resolving outstanding payments or receiving sufficient support. Failure to contact the ATO could result in further financial loss and a damaged relationship with suppliers.
Could Your Business Get Affected By These Closures?
Staying on top of your tax commitments is an ongoing job that can take considerable time and resources. While it’s a legal obligation, getting ahead of the game is key to regulating your business’ finances, enabling you to grow and plan strategically.
Whether you’ve received a disclosure notice or feel overwhelmed by these requirements, Advisory One can help you hit every deadline and create a financial strategy that suits your unique business. Contact us for professional business accounting services and tax solutions.