Small businesses are allegedly using the Australian Taxation Office as a bank, using the ATO as a psuedo-lender by putting off tax liabilities using payment agreements in order to pay other commitments first.
The allegations of small businesses cash flow management strategies by using the ATO come from an unnamed source cited by The Australian. According to reports, small business debts to the ATO over the last 18 months have increased considerably as a combination of post-GFC financial pressure hits small business and the ATO’s policy of “going easy” on small business during the current economic environment.
The ATO is continuing to reschedule payment terms for small businesses debts to the tax office, placing a greater burden on treasury and Government finances. According to the unproven story in the paper, June 30 indebtedness to the ATO attributed to small businesses, while normally no more than $2.7 billion was more than $8 billion this year.
Small business is in the ATO sights this year, with plans to increase the scrutiny of capital gains tax concessions claimed by small business each this. The ATO expects to raise $4.4 billion according to the Australian Financial Review.
