ATO revamps strategy for collecting unpaid tax and superannuation
The Australian Taxation Office (ATO) is intensifying its efforts to collect unpaid tax and superannuation by implementing a new strategy focused on businesses that repeatedly ignore communications regarding their financial obligations.
By Ro Elvinia
Under the updated approach, the ATO will escalate its actions against businesses that fail to engage or establish payment plans for overdue amounts, including Goods and Services Tax (GST), Pay As You Go (PAYG) withholding and employee superannuation contributions. As a result, businesses may encounter firmer measures sooner than in previous practices. This includes the issuance of Director Penalty Notices (DPNs) and garnishments.
Directors of multiple companies who allow unpaid GST, PAYG withholding and superannuation to accumulate will face a more comprehensive review of their debts. Such directors can expect DPNs that encompass total outstanding amounts across all related entities. If these directors do not act promptly, their personal assets could be at risk due to potential direct recovery actions by the ATO.
The ATO’s revised stance aims to create a fairer environment for businesses that meet their tax obligations while sending a clear message to those who do not. Businesses are encouraged to act swiftly to either pay outstanding debts in full or to set up payment plans to avoid harsher collection measures.
Tax practitioners play a crucial role in this initiative by encouraging clients to fulfil their tax responsibilities promptly. For clients unable to make full payments, the ATO suggests highlighting available options, including online payment plans for debts under $200,000. For clients facing genuine financial hardship, the ATO offers additional assistance, such as deferred payment due dates and potential interest remissions.
The ATO urges all businesses to prioritise their tax and superannuation obligations and to take proactive steps to address any outstanding debts. By doing so, businesses can avoid interest charges and further enforcement actions.
ABN Australia can help your business navigate these new ATO compliance challenges. Our expert team provides comprehensive tax and accounting services to manage obligations, avoid risks like DPNs and garnishments and ensure regulatory compliance. Contact us today to safeguard your business and secure peace of mind.
Published: 4th Nov 2024 | Last updated: 4th Nov 2024