The ATO recently released its Corporate Plan for 2023-24, detailing the 8 key focus areas for the year. That includes improving small business tax performance, strengthening cybersecurity and fraud detection capabilities, and continuing to invest in data and digital.
One key priority for the ATO is addressing the $50.2 billion in collectable debt as of June 2023, which has increased 89% since June 2019. The ATO says it plans to take decisive action with those failing to engage, as well as those who are purposefully avoiding payment obligations.
And most of that debt comes from small businesses. Deputy Commissioner Vivek Chaudhary told the Tax Institute’s 2023 Tax Summit in September that small businesses are over-represented in the ATO’s tax book, accounting for over 70% of collectable debt owed by all businesses.
Key initiatives
As part of its collectable debt focus, the ATO also plans to recover high-value and aged debt, as well as require employer superannuation payments. As part of the initiative, the ATO says it will employ differentiated strategies and targeted interventions, particularly for those who have capacity to pay.
With transparency in mind, the ATO says it plans to set clear expectations with regard to debt recovery approaches, and potentially firmer consequences where clients fail to engage.
Vivek Chaudhary says that those who don’t pay, or proactively engage, are likely to have interest and penalties applied to debts. Those who contact the ATO early, he said, will be better placed to discuss the options available.
Five specific areas of focus
Chaudhary says there are five areas of focus where the ATO’s ‘reset’ will be most noticeable.
He says the majority of unpaid superannuation guarantee charge ($1.8 billion) is owed by small businesses, and those employers will be held liable.
Audit adjustments are also in focus, particularly through the ATO’s audit initiated funded programs including GST Compliance Program, Tax Avoidance Taskforce, Shadow Economy, and Serious Financial Crime.
The ATO is also cracking down on refund fraud, which it calls ‘blatant theft’, aged, high-value debts which are likely to attract firmer action, and employers with new debts.
Do you have outstanding collectable debt?
The ATO has made it clear that those who proactively engage with them are more likely to avoid firmer action or interest applied to debt.Falanga & Co appreciate how stressful it can be to have outstanding debt. If this applies to you, we encourage you to contact us so we can ensure you get the right advice moving forward, and minimise any further costs.
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