Cash-strapped small business – Help from the ATO
The ATO has announced new measures to help small businesses that are struggling to manage their tax debts in the current economic climate.
12 month GIC-free payment arrangements
Businesses with an annual turnover of less than $2 million with an activity statement debt can apply to the ATO for a GIC-free payment arrangement from now until 30 June 2010 ('GIC' is the 'General Interest Charge', or interest payable on the debt, currently 10.13%). They will have the GIC remitted for a maximum period of 12 months, provided the payment arrangement is maintained.
I the past week or so we have had two clients receive this interest free period. The ATO also waived interest charged to the clients during the past 12 months. In total we saved these two clients over $30,000 in interest. If you are having trouble paying your activity statement debts, please contact us so that we can commence discussion with the ATO regarding accessing these benefits.
Deferred activity statement payment due dates
Small businesses can also request a deferral of payment on their next activity statement. Businesses with short term cash flow problems that pay quarterly and annually may be granted a deferral of up to two months, with those that pay monthly eligible for up to one month. Activity statements still have to be lodged on time, but no interest will apply for the period of the deferral.