Aug
27
Written by:
News Admin
27/08/2010 10:42 AM
On 1 June 2009, the ATO introduced two initiatives to help
small businesses that are struggling to manage their activity statement
payment obligations. These measures have been extended for a further 12
months until 30 June 2011.
These two initiatives are:
- Twelve month general interest charge (GIC) free payment
arrangements; and
- Deferred activity statement payment due dates.
A small business is one having a turnover of less than $2
million GST exclusive.
Twelve month interest-free payment arrangement
The ATO is extending the 12 month general interest charge free
concession for mutually acceptable and sustainable payment arrangements
entered into for activity statement (i.e. BAS) debts negotiated from 1
July 2010 to 30 June 2011. This concession may also
apply to payment arrangements negotiated prior to 30 June 2010 that are
subsequently renegotiated.
The ATO website states that the GIC concession only applies to
activity statement debts which includes GST, PAYG withholding and PAYG
tax instalments. It does not therefore apply to income tax or
superannuation guarantee debts.
The actual GIC-free period (maximum of 12 months) commences on
the day the payment arrangement is entered into with the ATO and ends
day on the day the final instalment is due.
Where the activity statement debt has been passed to a debt
collection agency, the business can enter into a GIC-free payment
arrangement with the relevant agency.
Businesses should call the ATO as early as possible on 13 11
42 if they would like to take advantage of this concession, or contact
the ATO via the Business Portal. An alternative for businesses with
debts less of than $25,000 is to call the ATO’s automated phone service
on 13 72 26 which operates 24/7.
Regardless of which method is used to contact the ATO,
businesses will be eligible for a GIC free payment arrangement. Once
the arrangement is approved businesses will receive a letter of
confirmation together with payment slips, or the ATO may require the
business to enter into a direct debit payment arrangement.
It’s very important that businesses contact the ATO
immediately if they are unable to comply with the negotiated payment
arrangement. Otherwise the ATO can commence legal action without notice
and also the interest free concession will no longer apply.
Deferred activity statement payment due dates
Small businesses experiencing cash flow problems can also
request an interest free payment deferral on their next activity
statement. Businesses 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 eligible for this deferral include:
- monthly statements for the period July 2010 to June 2011
(inclusive);
- quarterly statements for the period September 2010 to June
2011 (inclusive); and
- annual statement for the 2009/10 income year.
A payment deferral request must be made on or before the
original due date of an activity statement debt.
To apply for this concession, businesses can contact the ATO
on 13 11 42, or via the ATO Business Portal.
Activity statements still have to be lodged on time otherwise
a late payment penalty may be imposed for late lodgements. Businesses
can still apply for an extension of time to lodge activity statements
and can also have their tax agent to enter into the above arrangements
with the ATO.