With quarterly lodgment causing headaches for small businesses across Australia, it’s no wonder that over $13 billion is owed to the ATO in overdue tax by these small and medium sized enterprises (SME). A good litmus test to check the health of cash flow often occurs at business activity statement (BAS) lodgment time. A BAS is used to report and pay, GST, PAYG instalments and various other taxes. At this time a lot of payments are being made, therefore it can be a key period in which to assess the lifeblood of the business.
Even in times of financial stress it is imperative to keep on top of BAS lodgments. If not, non payment can attract a late lodgment penalty which will by permanently recorded as a bad lodgment. Therefore, even if you can’t pay, it is best to do your best to try and lodge on time.
In such circumstances in which you are unable to pay by the due date, entering into a payment plan can be a solution to help figure out how and when you will be able to pay off your tax debt with the ATO.
However, the best way to avoid stress around BAS time is to stay continually on top of financially matters of the company, ensuring that enough money is kept aside for tax purposes. Often times, it can be convenient to spend GST money collected to ease cash flow concerns, yet putting money into a high interest separate bank account can be a good way to ensure that the money for GST and tax come BAS time.
Well respected leading Brisbane insolvency practitioner, Jonathan Paul McLeod recommends seeking help and information as early as possible. In this way speaking with and insolvency specialist can help uncover options and create solutions. Please feel free to contact us today at McLeod and Partners for a confidential discussion of cash flow concerns or any other financial issues you may have.