Login
iscover
Businesses are being urged to be proactive in getting ahead of any tax debt they may have to ensure they don’t “fall foul” of the Tax Office.
Newsletter
Tax debt avoidance a recipe for disaster, warns credit expert
28 February 2025
•
8 minute read
Businesses aware of any tax debts are being called on to urgently lodge their tax returns as today marks the 2023–24 financial year company tax return deadline.
You’re out of free articles for this month
To continue reading the rest of this article, please log in.
Create free account to get unlimited news articles and more!
Gus Gilkeson, chief executive of Grow Capital, said businesses holding any level of tax debt must avoid the “sticking your head in the sand” tactic and be proactive in addressing it.
“Regardless of the reason, if you’re aware you’re going to have a tax debt, it’s always best to be proactive and get on the front foot,” Gilkeson said.
“Speak with your accountant and other financial services providers immediately, or if you don’t have these in place, consider seeking professional advice.”
Delaying lodging a tax return was not a strategy as it left businesses at risk of being fined, accruing interest and pursuit from the Tax Office, he added.
This was attributed to the fact that some businesses were aware they would likely owe the ATO money and would put off lodging their return to avoid difficult situations.
This tactic was not ideal, Gilkeson said, but a business owing the Tax Office wasn’t always a sign of untoward actions or processes happening “behind the scenes.”
“Perhaps your company has recently purchased or acquired another business and taken on its previous debts. It might be that you’re having cash flow issues as a result of unpaid invoices, or the business experiences a period of rapid growth that surpassed previous forecasts and projections.”
Despite the reason, Gilkeson recommended that businesses understand the options available to help them tackle any debts.
Inquiring about a payment plan, securing finance or knowing what deductions could be claimed were avenues he recommended for businesses to consider as there were always viable options with various professionals able to provide sufficient help or advice.
Proactive communication with the Tax Office was key as there was no point or solution in ignoring ATO deadlines.
“Proactive communication is always key. Keep the ATO and your financial services professionals well informed and let them know what to expect,” Gilkeson said.
“Again, depending on your circumstances you may be able to come to an agreement, if you’re open and transparent about what’s happening within the business and what your intentions are going forward.”
Though Gilkeson advised most businesses to engage in payment plans, finance, deductions or communication if facing debt repayments, he did note they must also consider individual circumstances as there was no one-size-fits-all approach.
“Whatever the final decision, it’s best to take action to avoid the potential of fines, garnishee notices, directors’ penalties and being reported to credit agencies, all of which can impact future business and finance prospects,” he said.
“We know the ATO is actively looking to recoup owed monies, and if your business is one of them, it’s a matter of when, not if. Don’t put off those difficult conversations, it’s simply not worth the stress or the risk.”
You need to be a member to post comments. Become a member for free today!
