On 10 May 2021, the Treasurer announced that, as part of the 2021-22 Budget, the Morrison Government will allow small businesses to apply to the Administrative Appeals Tribunal (AAT) to pause or modify ATO debt recovery actions where the debt is being disputed in the AAT.
See below for further details.
Currently, small businesses are only able to pause or modify ATO debt recovery actions through the court system, which can be costly and time consuming. Applying to the AAT instead of the courts will save small businesses at least several thousands of dollars in court and legal fees and as much as 60 days of waiting for a decision.
Small business can now have the confidence and peace of mind that they will be able to pause ATO debt recovery actions until their case is decided by the AAT. Specifically, the changes will allow the Small Business Taxation Division of the AAT to pause or modify any ATO debt recovery actions, such as garnishee notices and the recovery of General Interest Charge or related penalties until the underlying dispute is resolved by the AAT.
Taking these disputes out of the courts will let small businesses get on with what they do best. [It is only marginally less distracting, applying to a Tribunal, than a Court.]
Small business entities (including individuals carrying on a business) with an aggregated turnover of less than $10 million per year will be eligible to use this streamlined approach. The change will bring Australia more into line with the tax systems of the United Kingdom and United States.
These new powers for the AAT will be available in respect of proceedings commenced on or after the date of Royal Assent of the legislation.
(Treasurer’s website: 10 May 2021 Media Release)
The Ombudsman (Mr Bruce Billson of the Australian Small Business and Family Enterprise Ombudsman) welcomed the changes in his 10 May 2021 Media Release. He said:
“I commend the government which has acted quickly to implement a key recommendation in our recently released report: A tax system that works for small business which will allow small businesses to pause ATO debt recovery actions until their case is resolved by the AAT.
“ASBFEO’s tax concierge service and ongoing advocacy work has led to substantial tax administration improvements for SMEs, with leadership from ATO Deputy Commissioner Small Business Deborah Jenkins and government support.
Small businesses engaged in a tax dispute are encouraged to contact ASBFEO for assistance on 1300 650 460 or email info@asbfeo.gov.au .
(Ombudsman’s website: 10 May 2021 Media Release)
[10.5.21; LTN 87, 10/5/21]
Tax System that Works Report
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