Wednesday, September 19, 2012

Are you saving for your tax liabilities?

After a few years of leniency in the wake of the GFC, no more Mr Nice Guy...the tax office is now playing hard ball with Aussie businesses.

As reported in The Age last Friday, the tax office is now taking a much more aggressive approach on outstanding debts, not necessarily allowing payment arrangements, or, where payment arrangements are in place, making sure they are met within strict guidelines.  Some such guidelines include paying any other debt (PAYG or GST) in full whilst a payment arrangement is in place and if you default on a payment you could face immediate debt collection.  This is pretty hard going for a lot of businesses at the moment, particularly for those at the bottom of the food chain - if the big guns are slow paying this filters down to the smaller people and cashflow becomes extremely tight and stressful.  The tax office's view of if you can't pay maybe you're not a viable business and maybe you should shut shop is pretty frightening.  
Don't ignore anything from the tax office regarding an outstanding debt.  They can and are now promising to chase this in a take no prisoners way - you may be referred to a debt collector and maybe you will have legal proceedings issued against you.
If you can't pay a debt then speak to the tax office or your accountant immediately to find out what options are available to you. 
Implement a plan to save on an ongoing basis for your GST and income tax.  It is as easy as setting up another bank account and as soon as income comes in, shifting at least 1/11th (for GST only) to the second bank account....and then DON'T TOUCH.  This might mean rejigging how you pay your creditors and yourself so that your cashflow is not adversely impacted.
If you are having problems paying your bills, then seek advice.  A good accountant can help you with a cashflow budget - a great way to see on an ongoing basis where you are at and what's in the kitty.

1 comment:

  1. Great post Sarah - and a great motivator to keep on top of your accounts!

    ReplyDelete

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