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The ATO is revving up attempts to collect unpaid tax debt from small businesses dating back to the pandemic. Softer attempts to encourage compliance, such as SMSes and letter reminders, appear to be falling on the deaf ears of some small business owners. The ATO will now take stronger action that includes: * Issuing director penalty notices. This allows the ATO to issue garnishee notices against directors, offset any tax credits against director penalties or initiate legal recovery proceedings. * Adding a general interest penalty to tax debt – a daily charge for each day your debt remains unpaid. * Using credits or refunds due to you to pay off the debt, including credits you receive from other government agencies. In a worst-case scenario, you could receive a statutory demand for payment of the debts. If you fail to comply with this demand, the ATO can use your non-payment as evidence your business is insolvent and apply to wind up the business. If you are struggling to settle your tax debt, don’t ignore the situation. Communicate this to the ATO, who may be willing to set up a payment plan to make it easier to pay off your debt.
#accountant #tax #business |