By Tina Zawila
After years of accommodating taxpayers’ financial challenges throughout the COVID pandemic, the Australian Taxation Office (ATO) has recently stopped playing “Mr Nice Guy” and is operating within its powers to chase outstanding income tax debts and lodgements, charge penalties for failure to lodge returns, and apply general interest charges to outstanding tax debt balances.
Recently we have noted a sharp increase in the ATO’s activity to follow up taxpayers, to apply penalties and interest, and where, in the past, we have been able to request remissions and negotiate extensions of time and payment plans, we are often encountering ATO officers who are less inclined to show leniency and understanding.
In April 2022 I wrote an article titled “The Sleeping Giant is Awake” where I noted the ATO was starting to ramp up its activity to ensure compliance with the taxation system, so almost two years on we can hardly say the increase in activity is a surprise, but it does seem to have caught out some taxpayers.
THE MESSAGE HERE IS CLEAR
Make sure you lodge your tax returns and activity statements on time. If you need a payment arrangement to pay off a debt, request this early and stick to the agreed plan.
Remember, registered Tax Agents are able to access extensions of time for lodgement of returns, so if you need assistance, reach out to an agent and see if you can take advantage of their lodgement program.
If you have outstanding taxation obligations, don’t bury your head in the sand, the ATO’s data matching powers and ability to issue penalties and default assessment notices means that you will be on their radar soon rather than later and it’s always better to initiate a request for their leniency than to beg for it after the fact.
It also pays to keep good records to ensure that you accurately declare income and claim all deductions that you are entitled to. A qualified, registered tax agent can assist you with advice on what you can claim and what records you need to keep.
If you need help bringing your taxation compliance obligations up to date, call the professional team at UHY Haines Norton on 07 4972 1300.