ATO Taking a Tough Stand on $19.5 Billion in Unpaid Taxes
The ATO is turning its focus to its $19.5 billion in unpaid taxes (as at 30 June 2014) and has indicated that a new approach involving earlier intervention and legal action will be used to curb the increasing debt level.
This means more stringent payment arrangements, an increase in bankruptcy and winding-up action against individual and corporate taxpayers, and an emphasis on other statutory powers where employee superannuation entitlements remain unpaid.
Taxpayers are being warned that the thresholds for the commencement of bankruptcy and winding-up actions will be reduced to fall in line with other creditors who, on average, initiate proceedings at $35,000 for individuals and $93,000 for corporations.
This tougher stand has resulted in the ATO filing a whopping 556 winding up applications against corporations in May 2015 alone, much higher than the ATO’s average of 92 per month since around 2009-2010.
We recommend that business advisors work closely with their clients in coming months, particularly those with unpaid taxes or employee superannuation entitlements. Directors risk personal liability to the ATO for unpaid tax and superannuation debts and the non-lodgement of returns. Obtaining professional help early for clients having difficulty with tax and superannuation debts is key to resolving problems. It can also mitigate or avoid personal liability, fines and penalties which can quickly snowball the debts to an unmanageable size.
PKF offer a range of services that can assist both clients and business advisors in dealing with the ATO and any problems they might be facing, including disputes and recovery action. Call us today for expert and professional advice.