Small businesses struggling with ATO arrears urged to call free debt counselling hotline

Financial counsellors have urged struggling business owners to contact the Small Business Debt Helpline, saying the free service can help proprietors negotiate debt payment plans with the Australian Taxation Office (ATO).

In response to mounting economic hardships facing the small business sector, Labor’s 2022-23 federal budget includes nearly $15 million in funding for specialised small business mental health support and debt counselling services.

Of that funding, $4 million will go towards the Small Business Debt Helpline, a free-to-use service operated by Financial Counselling Australia.

Appearing alongside Small Business Minister Julie Collins in Hobart on Thursday, small business financial counsellor Sandra Blake said the funding came at a “crucial” time for those “weathering the perfect storm of debt, debt collection and debt challenges”.

Lockdown-era leniency on rent payments and business loans is coming to an end, she said, compounding the negative effects of spiking energy costs and widespread natural disasters on the business community.

“And now, of course, they’re having to repay those loans along with moratoriums they had from the ATO and their commercial landlords,” she said.

Blake’s commentary comes as the ATO ramps up its tax compliance efforts, ending the gentle approach to small business tax arrears it took through the worst of Australia’s COVID-19 lockdowns.

As business restrictions slowly fade into memory, the tax office is once again working to close the $33 billion tax gap — including the $11.9 billion owed by small business taxpayers but not yet remitted to the tax office.

Insolvency experts warn the ATO is unlikely to let up in its pursuit of those unpaid debts, but suggest the tax office is willing to work with small businesses which come forward for assistance.

Blake said the Small Business Debt Helpline can help in that process.

“We can negotiate with the ATO a payment plan that is affordable and sustainable, that will keep them in their business,” she said.

“The sooner people come forward, the more options there are for them to find a pathway out of their debt,” she added, noting that business owners “can ask us perhaps what they might consider a dumb question that they’re a bit afraid to ask their accountant or lawyer.”

In addition to debt counselling services, the Small Business Debt Helpline also provides information on how to access small business grants, training programs, and disaster relief, along with pointers to dispute resolution services.

The service is available free of charge at 1800 413 828 or online.