46: ATO Debt Crisis? Here’s How to Take Control and Avoid Penalties with Ellie Murdoch

Smarten Up! The Tax and Business Podcast

Struggling with ATO debts? Discover the smart strategies to manage your tax burdens and avoid costly pitfalls.

In this episode, Sally Preston sits down with ATO expert Ellie Murdoch to tackle a pressing issue faced by many businesses today — managing debts owed to the Australian Tax Office (ATO).

With the current economic climate, more business owners are finding themselves unable to meet tax obligations like GST and income tax payments. Sally and Ellie dive deep into the steps you need to take when you find yourself overwhelmed by tax debt, emphasising why ignoring the ATO is the worst move you can make.

From setting up realistic payment plans to navigating the complexities of ATO requirements, this episode provides practical advice to help you stay on top of your tax responsibilities and keep your business on track.

In this episode of Smarten Up! The Tax and Business Podcast, you'll learn:

• The importance of engaging with the ATO early to avoid penalties and stricter debt collection actions (01:19)
• How to establish a manageable payment plan with the ATO and the financial information required (02:23)
• Does your business qualify for interest-free payments on activity statement amounts? (04:43)
• The extensive documentation and financial details needed for payment plans over $500,000 (05:46)
• What happens if you miss a payment and the risks associated with defaulting on an ATO arrangement (09:06)
• Why ongoing compliance and consistent payment history are critical for maintaining your payment plan (10:57)
• What can’t be included in ATO payment plans (12:12)
• The importance of proactive financial planning to avoid using the ATO as a bank and how to manage tax debts effectively (15:15)

Ellie Murdoch’s insights underscore the reality that dealing with ATO debts requires prompt action, detailed financial transparency, and sometimes professional guidance. By taking proactive steps, maintaining good lodgement practices, and understanding the terms of payment plans, businesses can avoid escalating debt problems.

Remember, the ATO is not your lender of last resort, and the interest rates on overdue taxes can be more punishing than you think. If you’re finding it tough to stay on top of your tax debts, reach out to a professional who can help you navigate these complex waters.

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