Businesses of varying size and industry all have challenges. One of these is maintaining taxation obligations on a timely basis.
It can be convenient or easy to use the ATO as your banker, though for a number of reasons it is important to be up to date. So consider:
– As a director you may have personal liability for unpaid taxes.
– The ATO now have the authority to include arrears information to credit reporting agencies, impacting your ability to borrow.
– Like any behaviour, habits form. It gets easier to be and stay behind as you move forward.
Tax arrears are often the cause of a lack of planning, and an understanding of the cycle of your business cashflow. Sure, there can be unexpected events (such as bad debts) but in our experience some basic cashflow planning can eradicate some of these issues.
Talk to your adviser or accountant around how to better understand the cycle of your cashflow. There may be opportunity to improve or at least plan for it.
There are also some good ATO resources available at the link below.
This is useful if you have a dispute or otherwise are having trouble in meeting commitments. As a general rule – it is always better to keep communication open even if it is bad news to share.