Struggling to Pay Tax Debt?

With the Australian Taxation Office (ATO) hot on the heels of businesses and company directors with ATO debt, many Aussies are exploring options to get their tax debt under control.

Finance for ATO debt

While managing the complexities of day-to-day business operations and cash flow, you may have found yourself in the position of owing a tax debt to the ATO. If so, it’s essential to understand the root causes and seek proactive solutions to swiftly resolve the tax liability to avoid penalty action. At Earlypay, our finance solutions can help businesses optimise cash flow and pay down debt — including tax debt.

Invoice Finance

Invoice Finance allows businesses to unlock cash from unpaid customer invoices. Rather than waiting for customers to pay the invoices, Earlypay advances up to 85% of the accounts receivable value upfront which may be used to manage cash flow and clear ATO debt.

Invoice Finance works as a line of credit that you can use whenever you need it. So you’re not paying interest on a lump sum amount like you would with a term business loan. You only pay interest on the amount you draw down.

Trade Finance

Whether you purchase products overseas or right here in Australia, Trade Finance provides funding to pay suppliers upfront, so you don’t have to dig into your own working capital.

Used in together with Invoice Finance, Trade Finance facilitates cash flow optimisation, enabling businesses to meet their tax obligations timely and effectively.

Equipment Finance

Equipment Finance can help turn non-liquid business assets (like equipment or machinery) into cash, while the business retains the asset, ensuring business operations are not interrupted. The cash unlocked from an Earlypay Equipment Finance agreement may be used to help manage ATO debt.

Take control of your tax debt today and explore how Earlypay's finance solutions can help your business thrive while resolving ATO debt.

Consequences of not repaying tax debt on time

According to the ATO, if you do not pay your tax debt on time, a general interest charge (GIC) may be applied to the outstanding amount. The GIC for the April to June 2024 quarter is 11.34%.

Garnishee notices

The ATO have the authority to issue a garnishee notice to individuals or businesses that currently hold or may hold funds for you in the future. This legally obligates them to divert the owed funds directly to the ATO, instead of to your bank account. The garnishee notice may be sent to your bank or credit union, any customers owing you money or suppliers of merchant card facilities.

Director penalty notice (DPN)

If a company cannot repay its tax debt, the director may become personally liable for that debt. The ATO uses director penalty notices to commence legal proceedings against company directors to recover unpaid PAYG withholding, GST or unpaid superannuation.

It’s important to note that when a DPN is issued, the director’s personal assets are at risk.

Disclosure of tax debt to credit reporting bureaus

The ATO has the power to report businesses with tax debts to credit reporting agencies. This could significantly impact the credit score and ability to access credit in the future.

Legal action

Legal action taken by the ATO in response to tax debt may include:

  • Bankruptcy notice. A bankruptcy trustee assumes control over the assets and liquidates them to settle the outstanding debts.
  • Wind-up action. The ATO has the ability to implement the court order of a company to wind up. A liquidator will sell the company assets in order to repay creditors.

Help is available

At Earlypay, we work closely with tax debt negotiation specialists to help devise optimal outcomes for businesses with tax debt. Earlypay and our wider network of tax professionals can help businesses:

  1. 01

    Provide flexible finance options.

  2. 02

    Facilitate cash flow to support growth.

  3. 03

    Optimise debt position.

  4. 04

    Negotiate with ATO on debt options — payouts, repayment plans and debt reduction strategies.

  5. 05

    Reduce overall ATO debt.

Find out more about how Earlypay can help you manage cash flow to repay tax debt.

Discover a finance solution for your tax debt

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