BAS and the ATO – Compliance
by Colin Linke on 18/02/10 at 6:45 am
I know how it goes. You get busy and forget to lodge – and PAY – your BAS. Your friendly neighbourhood ATO compliance office gives you a call and you don’t know what to do.
Well the short answer is – get compliant. All my clients whether it be my Real estate or medical practice clients – whether in Melbourne or OS know that they must be compliant and that if they are then we can negotiate our way around numerous minefields.
In all honesty there are two very distinct issues here that you need to address.
1… Lodge your activity statements.
2… Pay what is owed.
You will always receive a better hearing from the ATO if you are compliant with the reporting issues associated with business and themselves. They like to know what is going on and even if you cannot pay I implore you to at least lodge your statements on time.
Now when it comes to payment in my experience the ATO is a very receptive body to understanding the cash flow issues of business. They will attempt to create a payment plan that meets yours and their needs and are more than willing to extend the timeframe to pay so long as you comply with your obligations on an ongoing basis.
But this is where most businesses come up short. They enter an arrangement and then break it. Now whilst they do not admit this the ATO will provide some leniency again here – but after the second time you are in trouble. Your issue will be escalated past the lower levels to areas that are much more demanding.
Consider this in your own business.
- Client x owes you $2000.
- Your accounts person/bookkeeper/husband/wife calls them and they agree to pay next Friday.
- That day arrives and you are not paid.
- A further phone call then gets a promise for payment on Tuesday.
- That deadline also passes.
- Your accounts person/bookkeeper/husband/wife then tells you about the issue and you call the client. Your discussion is a little more forthright and you demand payment.
- The next deadline passes and the details get sent through to your debt collector who wanders around to your clients premises and promises to remove your clients toe nails – with some 50cm secatuers! An actual true story.
Now the ATO have to be careful about using secateurs however they will get nasty sooner rather than later. However communicating with them is the best option you have of getting a working resolution in place.
Of course your accountant, or someone like Bentley Partners, who are experienced in negotiating with the ATO can take that in hand for you but making the payment is your duty. Make sure it becomes an unconditional process.
