So we are tackling ATO debts in this blog, but you know us by now, we don't like that dry ATO blah blah so we are going to be navigating it just like a classic episode of 'Friends'. Go grab a coffee (at Central Perk), get yourself comfy and let's dive into this sitcom-style guide to staying on the good side of the taxman-ian devil (aka the ATO).
1. The One with the Superannuation Guarantee Charge (SGC)
Remember the episode where Ross says the wrong name at the altar? Well, not paying your superannuation guarantee is kind of like that – a big no-no! The ATO is looking at a massive $1.8 billion in unpaid super, and they’re as serious about collecting it as Monica is about cleaning.
Small biz, you're in the spotlight! So make sure you're more reliable than Joey on audition day.
Why? Because superannuation forms part of employees wages. It needs to be paid! it's not optional. No if's, no but's. There are harsh penalties if it's not paid on time, take a read of this if you want to find out more.
2. The One Where ATO Debt Doubles
Here's a plot twist: ATO debt has ballooned from $26.5 billion to a whopping $50.2 billion (with most of it small biz debt), which is faster than Joey devouring a turkey at Thanksgiving. Now most of this happened during Covid where the ATO were like Ross saying "We were on a break!" but things have changed and thinking of the ATO as a bank is like expecting Joey to share food - it won't happen.
And if you have an old debt (more than 2 years) or one that is >$100,000 then expect the ATO to make contact soon ... very soon!
2. The One Where Being Proactive is GOAT
The taxman-ian devils new strategy is PROACTIVITY. We can expect quicker follow-ups and a tougher stance on payment plans. Don't assume you are going to get one if you are a serial payment planner (you know who you are 😉 and so do we, haha)
Now is not the time to bury your head in the sand, you are not an ostrich. Be a good corporate citizen and lodge your obligations on time (to avoid penalties). It’s time for small biz to step up and take responsibility, just like Chandler eventually did with his relationship with Monica.
So what taxes do you have to pay and when as a biz owner to keep on the good side of the taxman-ian devil? Well we have got you covered there, with another of our easy to read blogs so you can get on top if it all and here is one on due dates to round it all out (so no more excuses OK!).
3. The One Where You Pay On Time
The best defence against the taxman-ian devils new measures? Be as timely with your taxes as Monica is with her party planning. If you're struggling, communicate clearly with the ATO and early. It’s about being proactive, like Rachel chasing her dream job in Paris.
And if you don't have the money to pay straight away then engage with the taxman-ian devil to work through your options.
Heads up, if you are able to obtain an ATO repayment plan there will be general interest charges so don't expect an interest free loan. We have also been advised on pretty good authority (the taxman-ian devil) that giving out general interest remissions like candy will be ceasing. So once the debt is paid back and you want to try to get the general interest charges remitted, you will need a pretty good (and legitimate) reason.
But here is a pro tip if you don't want to be caught short- hive off your taxes as you go. Create a tax savings bank account and hive off GST, PAYG Withholding and Income Tax as you go, whether that be weekly, fortnightly, monthly or quarterly - whatever works best for you. As Monica would say, it's good health and hygiene. Not sure how to do this, then engage with us 😉 or your accountant to help and if you are using an accounting product like Xero it will do the heavy lifting on the reporting for you.
4. The Wrap Up
We know that dealing with ATO debts might not always be as fun as a 'Friends' marathon, but approaching it with the right mindset can make the process smoother. So, channel your inner Monica for organisation and your inner Ross for responsibility. Here’s to mastering our tax responsibilities with the spirit of our (and definitely my) favourite New York gang!
PS. Feel free to reach out if you have any questions or if you just want to share a good Friends pun, cos we are ALL IN to those 😆
Disclaimer: The information provided is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice