Tax Enforcement Overview
The ATO, or Australian Taxation Office, is responsible for following through on tax enforcement issues. As with most governmental tax agencies, they can be extremely intimidating, and it’s not wise to attempt to trick or cheat them.
Irish Bentley can help you deal with any tax enforcement concerns that you may have. Whether you have received a notice from the ATO or just want to get another opinion on your tax situation, our tax experts will be able to assist you.
Recent Increase in Tax Enforcement
Companies and industry experts are starting to notice that the ATO are issuing significantly more wind up notices than they normally do. The reasons behind it aren’t as clear, but it has become quite obvious that they would really like to recover more unpaid taxes. It could be a short-term situation that is related to other factors, such as the election schedule. Or, it’s possible that they are implementing policies that everyone will just have to become used to.
Methods of Tax Enforcement
One particular method that they are currently increasing is their right to place garnishes on debts. While this doesn’t cause a major difficulty to your business all at one time, it can be quite painful to slowly and continuously watch this drain occur.
Another method that is increasing is giving penalties to company directors. This isn’t possible in all forms of companies, but it can be difficult and demoralising to any business owners who have to deal with it. Therefore, not only for this case, we highly recommend examining your personal situation to see if you can be held liable for any issues that may come out around your company.
Typically, the ATO are much more lenient if you come forward and notify them of any tax underpayments relating to your company. We advise that you do this, because they will be a lot more likely to agree to set up a simple payment plan that will cause the least possible financial burden to your company.
Our experts can help you enter into negotiations with them to organize these payment plans. We have helped others through similar situations in the past, and our experience has taught us what to do to result in paying the least amount of fines while having the most beneficial payment plan overall.
Tax Enforcement on Low Debts
Many companies think they will be safe from any of these tax enforcement matters because of their low amount of debt. However, that may not end up being true. Lately, the ATO has been pursuing companies with debts that are even under AUD$100,000. Therefore, it may no longer be enough to simply hope you’ll slip under the radar for any payments that you haven’t yet made.
Wind Up Notice
A wind up notice is a last resort method of tax enforcement that can be put into use by the ATO. Before issuing these, they will try to communicate with the company to arrange for payments to be made. If a solution still cannot be reached, then a statutory demand can be lodged against the company in debt. This is an order to make the payments, and it can be enforced by the courts.
When all of these attempts fail to generate the results they are hoping for, a wind up notice can be issued. In this case, a liquidator will be appointed by the court, and this person will start to liquidate any assets owned by the company. The proceeds from the sales will then be sent to any creditors who are still owed money, including the ATO.
Avoid Penalties from Tax Enforcement
As is the case with many legal situations, the best way to avoid any penalties that arise from the tax enforcement policies of the ATO is to follow the rules. In other words, if you always follow the tax laws, then you will never be in a situation where you have to avoid penalties.
Our experts at Irish Bentley are more than qualified to assist and advise you on your tax situation. Plus, any fees that you pay us while setting up a preventative strategy will be lower than legal costs associated with defending yourself to the ATO.