Managing A Tax Debt Is Easier Than You Realise | Tax Assure

5 Reasons to Consider a Payment Plan for Your Tax Debt

With the ATO assertively taking action to recover the $45 billion in unpaid business tax debt, you can be sure to face some consequences if you have an outstanding tax debt.

Whilst facing your tax debt head on can seem very daunting, with expert assistance, you can find a solution that removes this stress from your day to day and enables you to get on with doing what you do best, running your business.

At Tax Assure we are constantly negotiating tailored payment plans for clients (we are usually working on 80 active matters at any one time) and know how effectively they can be used as a solution to your tax headaches. Payment plans are an effective tool for business in the face of tax debt because they help to:

1. Avoid the pressure of paying your debt off in full

Receiving letters of demand to pay your ATO debt in full is no doubt extremely stressful. Most businesses are facing tax debt because of an inability to pay the debt with ease. The job of the ATO is to ensure you become compliant with your debt, and whilst most people think you need to pay in full to become compliant, this is not the case. Entering into an ATO payment arrangement also allows you to become compliant in the eyes of the ATO and essentially ‘get you off their desk’.

2. Ensure ongoing business viability

A suitably crafted tax debt payment plan is designed to support your business cash flow and ultimately ensure the long-term survival of your business operation and securing your financial future. A poorly negotiated payment plan may see you default on payments and create further stress, so it’s worth engaging specialist assistance to ensure the plan is something that is achievable for your business to continue paying.

3. Prevent further ATO recovery action including winding up action, bankruptcy, garnishee notice and credit reporting

Leaving your tax debt unaddressed can lead to large penalties and risk of facing harsher consequences such as a Director Penalty Notice or credit reporting. Negotiating a compliant payment arrangement with the ATO avoids these harsher consequences and reduces your debt from ballooning in size due to additional penalties.

4. Open funding avenues if required

Gaining compliance with the ATO through an agreed payment plan can mean you have a far improved chance of securing funding should you require it. Sometimes lending forms part of your overall tax debt solution, and without a payment plan in place, lenders are unlikely to approve your application.

5. Allow you to sleep better at night

We regularly see the relief in our customers when a payment plan relieves the daily burden of wondering how you are going to pay your debt, and how your business is going to survive. Facing a tax debt doesn’t mean you are not good at running your business. There are a multitude of unforeseen circumstances that can lead to tax debt and the burden that comes with that is cumbersome. Finding a solution to help you pay your tax debt certainly leads to a better night’s sleep!

If you would like to explore whether a payment plan could form part of your tax debt solution, reach out to one of our team for a confidential and obligation free consultation.

Contact us today for a better financial future.