The impact of the COVID-19 pandemic is undoubtedly profound. A survey conducted by the Australian Bureau of Statistics indicated that 47% of businesses were still recording a drop in revenue for the month of July. And 27% of businesses expected a decrease in revenue for the month of August. A separate survey showed that the unemployment rate has been steadily increasing.
If you are one of these businesses or individuals, you may be finding it difficult to comply with your tax obligations. Thankfully, the ATO has implemented support measures to ease the burden if you owe a tax debt (COVID-19 Support Measures).
This article looks at frequently asked questions in relation to the ATO’s COVID-19 Support Measures, and ways we can help you navigate this crisis.
The ATO has imposed interests and penalties on me or my business. Am I eligible for remission or waiver of interest?
One of the support measures implemented provides that the ATO will generally remit or waive interest and penalties imposed on late payment of taxes. However, this only relates to interest and penalties that were imposed after 23 January 2020. If you or your business incurred interests and penalties on or before that date, the interests and penalties will not be automatically remitted or waived.
What can I do if the interests and penalties were imposed before 23 January 2020?
While the COVID-19 Support Measures do not cover interest and penalties imposed before 23 January 2020, you may request that the ATO waive these amounts and they will assess doing so on a case-by-case basis. You may also be eligible for a low interest payment plan, where interest is suspended moving forward, if a payment arrangement is in place.
We can assist you in assessing your financial situation and negotiating with the ATO on your behalf or your business’ behalf, for a payment arrangement. Depending on your situation, we may even be able to negotiate a remission or waiver of pre 23 January 2020 interest and penalties.
We have previously successfully negotiated payment arrangements, and remission of interests and penalties for our clients. This is one of the examples where the ATO had remitted approximately $47,000 in interest and penalties and accepted a payment arrangement. The ATO had previously rejected several proposals presented by our client.
Will interest and penalties continue to be imposed on tax debts incurred before 23 January 2020?
If the ATO has agreed to a suspension as discussed above, no interests or penalties will be imposed on tax debts incurred before 23 January 2020. This is provided that you continue making payments under the payment arrangement.
What if I have an existing payment arrangement with the ATO and I can no longer afford the payments?
If you or your business have an existing payment arrangement and can no longer afford to maintain the payments, there are options as well. We can help renegotiate the existing payment arrangement to free up your cashflow. We can also help negotiate a suspension of interest charges and penalties while the new payment arrangement is in place.
Are there other things that I can do to free up my cashflow?
Pearce & Heers is a specialist insolvency and advisory firm that provides advice not only on formal insolvency matters, but also on ways to avoid liquidation or bankruptcy. These are some of the ways we can help you:
- Providing you with advice, guidance and assistance in respect of strategies to restructure or turn your business around; and/or
- Negotiating settlements or payment arrangements with other creditors to free up some cashflow.
Contact Us For Assistance
If you or your business is experiencing difficulty in meeting tax obligations or debts in general, do not wait until it is too late. Please contact our Brisbane or Gold Coast office for a free, no-obligation consultation.