In a speech to the Council of Small Business of Australia, Tax Commissioner Michael D’Ascenzo confirmed his commitment to helping small businesses by offering twelve month general interest charge (GIC) free payment arrangements and deferring the payment date for activity statements.
“While most small businesses are meeting their tax obligations, global conditions are having an impact, with over a quarter of small businesses carrying a tax debt,” Mr D’Ascenzo said.
“We’ve introduced the GIC free payment arrangements and deferred activity statement payment due dates to help those small businesses that are struggling to meet their tax obligations. We don’t want the GIC or temporary cash flow problems to be the deciding factors between a business surviving and being able to meet its tax and superannuation obligations or becoming insolvent.
Businesses need to contact the Tax Office as early as possible on 13 11 42 to discuss their circumstances so they can negotiate a sustainable interest free payment arrangement.
“The Tax Office is also offering small businesses with temporary cash flow problems the opportunity to defer the payment date for their activity statement liabilities… extensions of up to two months are possible.
Twelve month GIC free payment arrangements
Businesses with an annual turnover of less than $2 million with an activity statement debt can apply for a GIC free payment arrangement from now until 30 June 2010.
They will have the GIC remitted for a maximum period of 12 months, provided the payment arrangement is maintained.
Deferred activity statement payment due dates
Small businesses can also request a deferral of payment on their next activity statement.
Businesses with short term cash flow problems that pay quarterly and annually may be granted a deferral of up to two months, with those that pay monthly eligible for up to one month.
Activity statements still have to be lodged on time, however, no interest applies for the period of the deferral.
More information
Businesses with a tax debt or experiencing payment difficulties should visit the Tax Office website www.ato.gov.au/businessdebt or phone 13 11 42 from 8.00am – 6.00pm Monday to Friday.
As well as other useful information there is a web page ‘Economic downturn – frequently asked questions’ which is a single point of reference for taxpayers.
There is also an ‘online calculator’ (payment arrangement calculator) that will assist taxpayers to calculate different payment scenarios based on their individual circumstances. Taxpayers can use this as a guide to propose an affordable and sustainable payment arrangement that enables them to address their tax obligations.
Article by Christie Lewis
Christie is Practice Manager at Alan Lewis Accountants . Besides accounting, her passion is for all things small business (and blogging, of course). You can contact Christie directly at christie@lewistaxation.com.au.
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