ATO Assistance Available When Experiencing Financial Difficulties or Serious Hardship

Posted on 1st May 2019 by Ashley Dawson

The Australian Taxation Office (ATO) is very often seen as the bad guy who just collects taxes.  However, if you are experiencing financial difficulties or serious hardship the ATO does provide assistance to taxpayers through the following means:

• Extension of time to meet lodgment of tax returns, activity statements and other documents
• Providing more time to pay tax debts
• Tailored payment arrangements and in certain circumstances this might even include interest free periods
• Remission of general interest charges incurred on tax debts
• Release from payment of certain taxes and/or penalties incurred

Financial difficulties can range from cashflow issues, loss of employment, bankruptcy, business closure and legal action causing disruption to business.

The ATO defines serious hardship as when an individual is unable to provide the following for themselves and/or their family or other dependants:

• Food
• Accommodation
• Clothing
• Medical treatment
• Education
• Other basic necessities.

The factors that contribute to serious hardship include family tragedy, financial misfortune, serious illness, and natural disasters.

Depending on the amount of the tax debt and the assistance being requested, the application may be verbal over the phone or conducted through a formal application process.

The tax debts that the ATO can consider releasing a taxpayer from paying are:

• Income tax
• Pay As You Go (PAYG) Income Tax Instalments
• Fringe Benefit Tax (FBT) and FBT Instalments
• Medicare Levy and Medicare Levy Surcharge
• Penalties and interest charges associated with the above debts

However, the ATO can only release individuals, partnership and trust from paying the above debts.  A company can apply for the remission of penalties and interest charges but there is no release available from the taxes it owes.

One of the conditions that must be met when applying to the ATO for assistance is that all outstanding income tax returns and activity statements must lodged.

The ATO is also aware that financial difficulties and serious hardship can impact on mental health for individuals and their families so you will also find links on the ATO website to Health and Wellbeing Organisations that can help with support and information with mental health and wellbeing.

We work with our clients to sort out their cashflow issues and we can apply to the ATO on behalf of our clients to obtain the above measures to help clients through difficult times.  So, if you are experiencing cashflow issues, financial distress, or serious hardship please contact our office on (08) 9316 7000 for help.