TAX OFFICE SME CRACKDOWN COMING

The Australian Tax Office is owed $30bn, two thirds of it by small and medium sized enterprises, with industry insiders warning a crackdown is imminent.

Insolvency experts Rodgers Reidy says the overlying message is clear – if you’ve got an outstanding tax debt, it won’t be forgiven. It says companies with tax debts should contact the tax office to arrange a payment plan or contact a small business restructure SBR practitioner, like Rodgers Reidy who can help in the process or provide advice.

Print finance expert Richard Rasmussen from Ascent Partners said, “The SBR programme is a cost effective way to handle poor trading or ascertain if there is a sustainable way out. It’s much like the Chapter 11 in the USA.”

Of the estimated 990,000 small business in Australia, only 28 have gone through a small business restricting practitioner in May, a number which has tax experts worried.

Rodgers Reidy says its understanding of the market is that small businesses are coming under greater and greater financial pressure in the current economic climate. It says, “For any small business with an otherwise viable business model, an SBR should be the restructuring tool of choice to relieve historical debt problems.”

It says that to think that only 28 opted for the lifeline of an SBR in May means that the message that SBR can save struggling small businesses at least cost and interruption is just not getting out there.

Rasmussen said, “I think that there must be a lot of printers out there that are in this position. And there are viable alternatives to going into administration or liquidation.”

Winding up applications and court liquidations are on the rise, with 440 in May, compared to 350 in March and 220 in January. Some 46 per cent of winding up applications last month were in Victoria. Voluntary liquidations have also shown an uptick in May, up from 480 in April to 620, the highest level for a year, with almost half, 47 per cent, in New South Wales.