The Australian Tax Office (ATO) is set to target up to 90,000 small businesses over the next three months, as part of a project to deal with businesses failing to comply with their tax obligations.
It's being called a major compliance operation, and the ATO is planning to request credit and debit card payment data (around 900,000 records in total) from several Australian financial institutions, including ANZ and American Express. Then, the organisation will match the data against ATO records to drill into those companies not meeting their tax obligations.
This is a serious undertaking, and it's one that's going to impact a substantial number of Australian small businesses. So what exactly does it mean for these companies?
SMEs will likely see more intense scrutiny
Given the sheer amount of data the ATO is procuring, and the number of companies being investigated, there's going to be a strong clampdown. This will involve in-depth investigation of company records and activities, potentially over the entire three-month period.
The ATO will also be searching for any discrepancies and mismatches with regards to tax returns and transactions related to the company, and looking to follow up on issues that arise at this stage. Small businesses can be sure they'll hear from the ATO if there's a discrepancy flagged during the search.
Companies could face financial difficulties – but there is an option
Of course, a number of companies are likely to face financial difficulties as a result of this clampdown. If businesses have not been complying with their tax obligations, the financial repercussions could be severe – especially if a company is already facing financial difficulty or the possibility of liquidation.
Business.gov.au recommends seeking advice and support as soon as possible when a company runs into trouble, in order to better understand what options are available.
Corporate Lifeline will work with companies and do everything possible to try and save the organisation. This means consulting and providing useful advice on the available options for the business.
If liquidation is necessary, businesses will have expert advice on hand throughout the process. This can certainly make each stage easier to manage. The process usually takes anywhere from three to six months, depending on how quickly the liquidator is able to carry out the necessary investigations within the company. The entire process will also often require ongoing consultations with creditors.
Reach out to Corporate Lifeline to learn more about the various solutions available for businesses facing financial difficulties, including restructuring options and liquidation processes.
