iscoverThe ATO is likely to ramp up actions to wind up non-paying small businesses with tax debts, says one finance specialist.
Tax office to get tough on SME debt: finance specialist
30 July 2015
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4 minute read
Commenting on a recent inspector-general of taxation's report that found the ATO was owed $35.3 billion in 2013-14, up 9.7 per cent on the previous financial year, Scottish Pacific CEO Peter Langham warned small business that the tax office is likely to ramp up debt collection efforts.
"It is an astronomical amount the ATO is chasing," Mr Langham said.
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"Given the size of the debt, the ATO is likely to make it much tougher for small businesses to run up debts in future, so it's a great time for SMEs to look at better ways to improve their working capital," he said.
Anecdotal evidence that the ATO is ramping up actions to wind up non-payers means SMEs and their directors who delay paying ATO debts are on a dangerous path, according to a statement from Scottish Pacific.
"Of those SMEs not paying their ATO debt, there are undoubtedly many viable businesses that have just not managed their working capital well," Mr Langham said.
"Getting the right commercial finance to support your business – and help it thrive, not just survive – is really not that onerous. There might be a few more forms to fill in, but you'll end up with working capital to fund business growth.
"Our message to SMEs is don’t use the ATO for convenience purposes, because while it might seem like a short-term fix for your cash flow problems it's just delaying the inevitable."
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