Talk to us early: Tax commissioner Michael D’Ascenzo delivers plea to struggling companies

Australia’s Commissioner of Taxation has implored struggling companies to talk to the Australian Taxation Office as early as possible and has promised the ATO will do what it can to get viable businesses “over the line”.

In a candid and wide-ranging session at the Council of Small Business of Australia’s national summit yesterday, D’Ascenzo revealed the ATO has entered into payment arrangements with 250,000 firms and stressed companies will receive an empathetic hearing.

“I think a real problem we are facing in the ATO is getting people to come to us when they have difficulties,” the tax chief said.

“We should be the first people [struggling companies] should want to speak to. In most cases, we will be able to help get you over the line.”

D’Ascenzo said the ATO completed 10,000 free tax advice visits that come with “no strings attached” and said there are a range of options to help business owners who might be having “sleepless nights” about their tax affairs. He says the ATO has formed a relationship with mental health initiative Beyond Blue to support its efforts with taxpayers who are struggling to cope with a business issue.

There is one caveat to the ATO’s assistance, of course – the business will only receive help if the ATO is sure it is viable.

D’Ascenzo said ATO officers are armed with a business viability assessment tool to determine whether a business actually does have a chance of meeting its tax obligations under a payment arrangement and he concedes that business owners can take a different view of viability.

“We can’t support businesses that are not viable,” the Commissioner said bluntly.

D’Ascenzo also addressed new phoenix company laws that have raised concerns with the Law Council because they make directors personally liable for company tax and superannuation payments.

D’Ascenzo said the new laws would not change the focus of the ATO on “genuine phoenix companies”.

“We are happy to work with stakeholders to make sure our processes and procedures protect those who are unable to pay but are not genuine phoenix operators.”

The Tax Commissioner also went on the front foot against tax experts who have expressed concerns that the ATO’s use of industry benchmarks to target SME underreporting of tax obligations is a blunt instrument.

D’Ascenzo said 900,000 businesses had been assessed against the benchmarks and 90% had been found to be within them.

About 30,000 businesses received “please explain” letters from the ATO and 5,000 businesses received follow up. Of these, 70% increased the amount they reported in the following tax year.

“It’s really just those that haven’t answered our queries where we go further.”