The Tax Office pledges tougher line as debt hits $20 billion. With Easter fast approaching it’s time to see if your cash flow can withstand a few shocks during the holiday break.
If your cash flow is a bit tight, don’t feel too bad, the ATO are struggling to. The article below was in the Financial Review on Thursday. March 19.
The ATO have now decided they will be collecting their debts sooner rather than later as their cash flow is now way too tight.
What does this mean for all of us. Four things;
- If you owe the ATO they are going to be putting pressure on you a lot earlier now.
- If your client (your debtor) owes the ATO they too are going put pressure on them a lot earlier.
- This means the ATO being the noisiest wheel will get the most grease ie most money before you do.
- They may even decide to wind them up prior to you getting a chance to be repaid.
Don’t let the ATO beat you to the punch and collect money before you do. Be diligent and proactive and have a strict policy for people who are outside your usual credit terms.
The broken promises you hear from delinquent clients should be inside 90 days from the invoice.
Let Slater Byrne Recoveries help your cash flow and do the hard work to collect the hard debts.
Tax Office’s Chris Jordan pledges tougher line as debt hits $20b
The Tax Office will act more swiftly to recover unpaid tax and initiate bankruptcy procedures as outstanding annual debt climbs beyond $20 billion.
Tax commissioner Chris Jordan has said the ATO is bringing forward the point at which it takes legal action to recover debts from both individuals and companies.
While the ATO has in the past waited for a company’s outstanding debt to reach more than $340,000 before acting, for example, the benchmark for action could be slashed to $93,000.
“We will be taking legal action earlier when warranted,” Mr Jordan will tell a Tax Institute conference on Thursday.
“This means initiating bankruptcy and wind-up action where there is evidence that a taxpayer is insolvent, and looking to use other statutory powers where businesses have failed to pay employee superannuation entitlements or pay amounts held in trust.”
Debt is accumulating at a faster rate than the ATO can ramp up debt management services.
An update to this article can be found here.
Liam White joined the Slater Byrne Recoveries team in early 2013. He has worked across the credit & dispute resolution industry for a number of years. He is currently working in a Marketing/Head of Sales capacity at Slater Byrne Recoveries.