As many micro enterprises find it difficult to meet their tax and superannuation obligations due to a lack of time and resources, we provide them with a range of tools and calculators such as the capital gains tax small business concessions calculator, the superannuation guarantee charge statement and calculator, and the GST property tool.
We are also using technology such as online web seminars to enable more businesses to access our help and assistance.
Given that people from culturally and linguistically diverse backgrounds, Indigenous Australians and people with a disability are represented among the ranks of the self-employed, we give special attention to the needs of these groups in our help and education activities. We particularly look for opportunities to reach micro enterprises by partnering with intermediaries, including other government agencies and community organisations.
Case study
Collaboration the key to community-based help
In June 2012, the ATO collaborated with local councils, industry associations and other government agencies to offer personalised assistance to small business operators in western Sydney to help them better understand and comply with their tax and superannuation obligations.
Launching the program, Commissioner Michael D'Ascenzo said that 'because good business depends on good relationships, our small business assistance program aims to make our support practical and accessible'.
We provided 600 assistance visits to individuals, and 415 attended one of 27 seminars, including three in languages other than English: Arabic, Vietnamese and Chinese.
Record keeping
Sound record keeping practices are the cornerstone of preparing and lodging accurate tax returns, activity statements and other documents with the ATO.
Our website provides access to a range of assistance products and services to help new and established businesses get their record keeping practices on the right track.
Businesses can phone us or use our website to request free on-site support from experienced ATO staff to help them prepare for their tax-reporting obligations.
Support for businesses affected by natural disaster
For businesses affected by natural disasters, we provide special assistance for tax and superannuation arrangements where we can, including:
- fast-tracking refunds
- automatically granting lodgment and payment deferrals to all businesses in the affected regions
- remitting interest and penalties
- deferring compliance and debt-recovery action in affected regions
- working with other local agencies to identify taxpayers experiencing serious hardship
- helping to reconstruct tax records where documents have been destroyed, and making reasonable estimates where necessary
- offering lodgment and payment deferrals when appropriate
- encouraging taxpayers requiring additional support to contact us.
We recognise that businesses outside the directly affected regions may also be significantly impacted by natural disasters, and extend our support to them when we become aware of their situation.
Support for businesses in severe difficulty
We provide intensive assistance to taxpayers who may not have the capacity to meet their tax and superannuation obligations as a result of illness, injury, tragedy or severe financial stress. These circumstances may be temporary, or they may necessitate the taxpayer ceasing their business.
Our assistance can include intensive one-on-one support from experienced ATO staff. We seek to improve taxpayers' understanding of their obligations, and help them to lodge any outstanding income tax returns and activity statements. We discuss payment arrangements or a release from payment where there is hardship, and help taxpayers that can no longer trade to leave the tax system by expediting ABN and tax role cancellations.
Managing tax and superannuation debt: supporting viable businesses
Where a viable business is having difficulty meeting its tax or superannuation payment obligations, we work with the business owners to get them back on track. In many cases this will involve a sustainable payment arrangement, aligned with the expected cash flow of the business.
A key factor in our decisions on payment arrangements is the viability of the business, that is, its capacity to pay its current debt and meet ongoing business commitments. To determine this, we use a business viability assessment tool, ensuring a rigorous evidence-based approach and fair and consistent decision making.
To ensure a business does not get a competitive advantage by not paying its tax or superannuation debt, we take firmer action, such as issuing:
- garnishee notices - enabling the Commissioner to collect money owed by a third party to a taxpayer with a tax debt
- director penalty notices - enabling the Commissioner to commence proceedings to recover certain tax debts (for example, pay as you go withholding amounts) personally from a company director, if a business
- is not willing to work with us
- continually defaults on agreed arrangements
- is not viable and doesn't take steps to resolve the situation.
A fact sheet that explains in more detail the ATO's firmer action approach can be found on www.ato.gov.au
Businesses having difficulty meeting their tax or superannuation payment obligations should contact the ATO early. This makes it easier for us to assist them in dealing with their obligations and improves the prospects of businesses with short-term cash flow difficulties remaining viable.
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Last Modified: Thursday, 19 July 2012