The Growing Level of Tax Debt
Looking at The Commissioner of Taxation Annual report 2013–14 for presentation to Parliament on 10 October 2014 from an insolvency perspective it looks like the ongoing challenges in the economy are continuing to affect small businesses ability to pay their ATO debts.
Tax debt collectable by the ATO increased by $1 billion and insolvency debt increased by 800 million.
ATO imposed penalties, interest and remissions are up but the ATO stated that,
“Research suggests that small businesses are giving a lower priority to tax debts than to trade debts. Also, businesses are taking longer to pay each other, particularly large businesses paying small businesses. This has potential flow-on effects in terms of solvency.” https://www.ato.gov.au/uploadedFiles/Content/CR/downloads/n0995-10-2014_js32662_w.pdf
We agree with the findings of the ATO’s research based on our insolvency appointments in the past year.