Since time immemorial it has been said: ‘lend your money to lose your friend’. In the case of the ATO – an unwilling lender – this is one friend you will not lose regardless of how much you owe. Rather, they have some strong protocols to collect outstanding debts. Further so, the ATO has tightened their debt collection guidelines. This specifically affects corporates and small business entities who owe more than $10,000 and are over 90 days past due (Source: SMH).
With more than $19b in collectable debt as at 30 June 2016, the ATO has whipped up some interesting ways to collect taxes. From reporting to credit agencies or having third parties collect tax debts on their behalf, the ATO is getting more focused on collection. Since 2014–15, there has been a gradual but sustained improvement in tax payment performance. Over the year to 30 June 2016, the collectable debt owed by individuals fell by 8.2%. During the same time period, the number of cases of collectable debt fell by 11.4% (ATO Annual Report 2015-16).
So what does this mean to the average taxpayer who considers the ATO their friend? Does it require expertise and professional intervention to ensure you get adequate respite from their collection calls and letters? Short answer: yes – you need someone who can understand your situation. With professional help, you can draft a response and ensure it is followed up diligently. The result of this effort is to devise an affordable repayment plan in place or are eligible for a waiver due to unforeseen circumstances and events.
In 2015–16, The ATO found online payment plans were 22.4% more effective in collecting debt than payment plans entered through more traditional channels (ATO Annual Report 2015-16). It is essential to note that the ATO is a government department and without sufficient documentation and explanatory statements, they are most unlikely to accept your story. Although the ATO is your best friend given they provide an unsecured line of credit, it is often a friendship that is fraught with conditions and repercussions that may cost you dearly in the long run.
At Australian Debt and Insolvency Solutions (ADAIS), we specialise in providing assistance to those who have tax debts and are unable to repay them in one single payment. We care to review your circumstances and propose appropriate solutions to deal with your ATO debts. We liaise with the ATO and any other creditors you may have to negotiate a suitable repayment structure along with appropriate measures to keep your debts in check. Where necessary, we can obtain refinance against your property or fixed assets and look at obtaining a consolidated loan for all your outstanding debts to ensure it is paid back in one simple monthly instalment.