Tax Debt Loans Australia

Towards the second half of 2015, the Australian Tax Office took a stronger stance at imposing penalties for businesses that were failing to keep up with their tax commitments. News reports and statements on the website all indicated that stronger measures will be enacted to ensure businesses who are not up to date with their taxes do not gain a financial advantage. Evidence of this can be seen through the signification increase in the number of garnishee notices and winding-up applications filed by the Tax Office over the last few months.

According to the ATO website, the laws on tax enable the Tax Office to impose administrative penalties for a range of conduct when it comes to recovering outstanding tax and superannuation debts. This includes businesses not taking reasonable care in claiming a deduction to which they are not entitled, or making a false or misleading statements on their tax reports.

There are numerous reasons as to why businesses get faced with past due taxes. A lot of cases can come down to lack of knowledge, incorrect lodging procedures, and even bad accounting, all of which creates problems with business tax. Garnishee notices and wind-up action are two examples of the measures ATO can take against businesses who don’t have the capacity to pay and resolve their tax debt situation.

Garnishee notices refer to the notice given to a financial institution which holds a person or business’ money, and allows them to make direct payments to the Tax Office to reduce the level of debt. A wind-up action describes the process of company liquidation – once ordered by the court, a business is required to liquidate its assets and distribute the resulting funds to the company creditors.

Bad Debt Loan

According to news reports, the ATO is now making up to 300 wind-up applications a month to enforce their stance, which is a dramatic jump from long standing average of 92 applications per month. This is further exacerbated by the decrease of the debt level required before taking action. Previously, the ATO would usually wait for business debt to reach $340,000, but a new wind-up threshold of $93,000 has been set in place which allows the ATO to target a bigger pool of businesses and pursue debt recovery. The issue of garnishee notices place a heavy toll on business operations, as the cash used to pay for employee wages and supplier resources haven been taken by taxmen. There have already been reports of Australian businesses falling victim to this strategy, with one construction firm who is in debt of to the ATO of $14,000 can no longer sustain to pay the wages of its employees.

Debt Consolidation Company

Businesses must be more active when it comes to tackling ATO debts, to avoid critical situations such as these. DebtFix can help you manage tax debt by providing tailored loans which meets your needs. Consult our team to apply for a business tax debt loan – don’t go through this alone!