ATO acting commissioner Jeremy Hirschhorn said the office is now actively chasing its debt book and simply ignoring it will raise a red flag.
“Through the course of the pandemic, we deliberately pulled back from starting new audit activity, but also from actively engaging with our debt book,” he said at the COSBOA National Business Summit.
“As we come out of the pandemic, we will be engaging with the debt book – and you are already starting to see that – but again with a spirit of engagement and transparency.
“What we would say in return is: if we reach out to you, please don’t ignore us, even if you’re doing it tough.
“We have payment plans and there are various ways of dealing with us that take into account your individual circumstances, but we can’t do that if you don’t engage.”
Mr Hirschhorn said the ATO was also working on improving mutual engagement and transparency with small businesses, and with new tax initiatives this year this was vital for both sides.
“After such an uncertain few years, the importance of mutual engagement and transparency is paramount,” Mr Hirschhorn said.
“This is something you will see from us over this next period.
“There is certainly no ‘one size fits all’ approach – we know that parts of the economy are doing very well, but other parts are still struggling.”
Mr Hirschhorn said the ATO recognised there were tension points in the system.
“The nature of law is that it can often be very binary in outcomes even though the real world is on a spectrum,” he said.
A good example of this was the current confusion around the contractor versus employee distinction.
“In the real world they are often not that different at the margin, but in terms of consequences for all sorts of regulators, they produce really different outcomes,” Mr Hirschhorn said.
“And so we are thinking about how, as a regulator, can we give practical certainty around some of those hard, vexed questions for people who are trying to do the right thing, by giving them certainty around those sorts of issues.”
Heading into the end stretch of the tax year, the ATO was aiming to ensure the range of tax incentives coming through the tax system were “as easy as possible and as certain as possible for small businesses to claim.”
“Whether that is measures to help boost cash flow, like the instant asset write-off or loss carry back, or reduced tax rates,” Mr Hirschhorn said.
“And, of course, if the measures announced in the recent Budget are passed, we will also work to ensure we help people get those benefits with confidence.”
The ATO also wanted to make sure its small-business dispute mechanism was fit for purpose.
Mr Hirschhorn said the ATO wanted to ensure a fully and structurally independent administrative review of small-business disputes, as well as funding to “level the playing field” where it has external representation.
“We want to make sure that honest small businesses aren’t out competed, or left holding the can of unpaid invoices, by phoenixers or other bad participants in the system,” he said.
“That will continue to be part of our approach coming out of the pandemic, to make sure an honest business is not disadvantaged, but advantaged, by the tax system.”
Tony Zhang is a journalist at Accountants Daily, which is the leading source of news, strategy and educational content for professionals working in the accounting sector.
Since joining the Momentum Media team in 2020, Tony has written for a range of its publications including Lawyers Weekly, Adviser Innovation, ifa and SMSF Adviser. He has been full-time on Accountants Daily since September 2021.