So you owe the Tax Office money? Here is what you need to do.
Ah yes the ATO. The tax man. One of only two guarantees in life. Of all the company liquidations and bankruptcies we see each week, there is always one constant- they owe the ATO money. In the last 5 years, the tax office has become much, much more active in the pursuit of its debts. I for one, commend them and it should have happened a long time ago. They will now issue Director Penalty notices, Winding Up proceedings, legal action, along with using a panel of debt collectors. Despite all their good work though, they are still owed over $20 BILLION dollars by Australian individuals and companies. Whilst it might seem like they are this faceless, heartless, greedy monster, I can assure you they are not and the ATO now have some of the most accessible and helpful hardship policies and flexibility in the country. If you do find yourself owing them money, here are my top 5 tips to deal with it or avoid it happening in the first place:
1. Contact them and ask for help. Regardless of what you might think, they will work with you. You just need to reach out to them.
2. GST is their money, not yours. Set up a separate GST and TAX account. Transfer 30% of your proceeds to this account every time you make a sale. If you aren’t registered for GST, then just transfer the tax portion. If you make a loss, you will get it back. If you make a profit, you’ve already got the funds there ready to go.
3. Use a bookkeeper or tax agent. PAYG, GST, FBT, MYOB. And I thought America and their law enforcement agencies were the kings of the acronymn! There is so much to know and understand, it’s no surprise so many people get confused. If this is you, outsource. Remember though that you are still responsible for the information being correct.
4. Don’t ignore them. They now have teeth and if you try and hide, they will come after you.
5. Acknowledge their purpose and try to view them in a different light. Australia is an incredibly entrepreneurial country with some of the best incentives, grants and support systems in the world for new businesses. Remember that your tax dollars are helping others and the ATO have no desire to ruin your life. They want to see businesses do well and succeed.
Hope this helps guys. And no, I have not been paid by the ATO to write this ?. I simply believe that they deserve to be paid for the work they do, like any creditor. Cheers