Effective ATO Debt Renegotiation Strategies
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One of the biggest challenges many businesses face when dealing with tax debt is the upfront payment requirement from the Australian Tax Office (ATO). This can often push businesses into further financial strain, especially if they are already dealing with external pressures like supply chain issues or staffing shortages.
Recently, we worked with a commercial air conditioning company that had been significantly affected by COVID-19 and related business disruptions. They had already been through rounds of discussions with the ATO, and unfortunately, the director had taken drastic measures by borrowing the remaining equity on his home to meet an upfront payment.
Avoiding Drastic Measures
Three months later, they were unable to keep up with their ongoing payments, leaving them with no reserves. Thankfully, their accountant referred them to us. After stepping in, we were able to take a different approach. We went back to the ATO, explained the situation, and avoided the need for any additional upfront payments. If we had been involved earlier, we would have advised against risking the director’s home for a commercial business in this situation.
By negotiating with the ATO, we reduced the debt by about 30%, significantly improving their cash flow. The director can now sleep easier at night, knowing the business is on a long-term, manageable payment plan.
Renegotiating Existing ATO Payment Plans
Many business owners aren’t aware that they can renegotiate their ATO payment plans even after they’ve agreed to terms. We recently helped a Victorian business with $250,000 in tax debt that had been paying $5,000 a week, a massive burden on their cash flow.
By stepping in, we were able to renegotiate the plan to a much more manageable $5,000 per month. This reduction in cash outflow has taken the pressure off the business, and in addition, we were able to reduce their total debt by $70,000 in interest and penalties.
Getting Rid of Interest and Penalties Early
We often hear businesses say, “We can’t get rid of the interest and penalties until we pay off the core debt.” However, we know from experience that this isn’t the case. We specialise in addressing interest and penalties from the outset, allowing businesses to breathe easier from the beginning of the process.
By reducing payments and eliminating a significant portion of the debt, we’ve been able to give our clients the financial relief they need to move forward.
Watch the full interview for more details on how we help businesses resolve tax debt and improve cash flow.
If you’re struggling with an ATO payment plan or feel like there’s no way out, don’t hesitate to reach out to us. We can help you negotiate better terms and get your business back on track.
Need help with your ATO tax debt? Contact us today to see how we can lighten your load and help your business thrive.
Disclaimer: The information provided in this article is for general informational purposes only and does not constitute professional advice. While we make every effort to ensure the accuracy and relevance of the content, it should not be relied upon as a substitute for consultation with qualified professionals, including legal, financial, or tax advisors. Each business situation is unique, and we recommend seeking tailored advice that considers your specific circumstances before making any decisions regarding tax debts, insolvency, or related matters. Tax Assure and its authors disclaim any liability for actions taken or not taken based on the content of this article.
