Posted by Annalisa in I have just come off the phone from yet another frustrating phone call with the Australian Taxation Office. I can get over the fact that I have to wait an excessive amount of time every time I call, but what I can’t get over is the lack of respect and understanding shown to Australian small businesses by the random ATO phone operator I speak to every time about my business.
Like most small businesses times are tough. For me in particular my business has been greatly affected over the last 12 months by a whole range of factors which have restricted my cashflow. Many of our clients are Queensland based, when the floods hit this caused a large dent in some of our regular work from there, not to mention the open invoices they have struggled to pay (and no, I don’t dare hassle them for it either). We have had clients not pay very large invoices resulting in an extremely costly – in time and money – court case which we won. But although the original invoice was covered, only a small percentage of the exhorbitant legal fees were rewarded to us. And to top it all off we had the unfortunate pleasure of meeting face-to-face with an assuming “business” con man who also managed to rip us off in the sum of thousands of dollars. Add to that global economic uncertainty, yo-yo’ing interest rates and a general trend in the corporate world to reduce costs thus affecting local outsourced services, then anyone still in business and keeping their head above water should be rightly proud.
They should also have the support of the Australian Government and in particular the people we all love to hate, the Australian Taxation Office. Regardless of all the woes my business and yours may be suffering, we still manage to employ Australian’s, pay them regularly, keep work in Australia and add our sizeable chunk to the economy. Threats of shutting down a business which has been operating for over ten years are unneccesary and just add to the stress most business owners are under.
GST; we all either love it or hate it but we all face facts and deal with it as a part of our every day business life. In my business I keep a GST account to store the governments money until they come calling every quarter to take it back. Occassionally due to unforeseen circumstances I have to dip into this account to keep staff and debtors happy, I am sure this sounds familiar with many of you. This incurs a shortfall with the ATO and arrangements are then entered into. The golden rule is never stop talking to the ATO, keep them informed of your situation and more importantly pay them regulalry, even if it is just a small amount, keep passing them cash to show you are a good citizen and good business owner. There is no getting away from tax debt but there does need to be leniency from the ATO, especially for small business.
If I had one suggestion for the faceless men and women of the tax department it would be to form a team specialising in small/medium business tax assistance. Let us, after holding for at least an hour, talk to someone who is familiar with each of our own individual business history. Yes I can imagine the logistics of this as being “quite hard” but unlucky, life and business is hard, we deal with it, so can you. Get some compassion ATO and support small business, we are generating wealth for the country too!
Not happy Jan, can you tell?
Thanks for sharing Annalisa.
A lot of businesses have been using the ATO as a bank/loan facility which has forced the ATO to take up such extreme measures quite recently. Keeping the ATO in the loop is THE best way to go, prior to defaulting as opposed to post defaulting. They are human too, and often offer a “review” period or mutually agreed upon payment arrangements.
Consider asking your Tax Agent to do the calls for you and hopefully keep the stress away!
I agree with you wholeheartedly Annalisa. I am in a similar position with my business here in Adelaide.
However Janna, I also agree – my brother is an accountant, and my business accountant, and I leave all the worrying about that part of the business to him – I just pay up when he tells me!
Valid points Janna and thanks for commenting however they should consider becoming a little more “real time” than purely relying on the excuse “our system says …”. At the end of the day, I could have been a stay at home mother and relied on the Government for payments for the past eight years but I got off my butt, started a business and added my bit to the economy. I shouldn’t be penalised for that! The whole call initially was just trying to pay out an arrangement in full!
Hey Ruth, thanks for the comment and I sympathise that you’re in a similar position. I also get how it is supposed to work as a system however times are tough and my business has been running for 11 years now and I’m extremely proud that I’ve managed to dodge an overload of situations that could have forced me to shutdown many times. Besides, I’d rather give the ATO the money rather than pay my bookkeeper to spend anywhere up to two hours on a call with them!
Hello Annalisa
I can sympathise with you on this, having myself and my team spent large amounts of unpaid time on the phone to ATO on behalf our clients.
Just yesterday we had a conversation with them that went around in circles, as the person on the other side kept asking can it be paid within a month when we initially advised when the conversation started we needed a payment arrangement of 3 months.
It is unfortunate that the ATO has needed to take these measures, but as Janna said many small business have used the GFC as an excuse not to pay there taxes which has impacted on the many small business that are doing there best to offer employment to many people and to keep there doors open.
It would be ideal if the ATO assigned case managers to business that really wished to settle there tax affairs and treated each one case by case. It appears they like many other large companies are moving to a call centre setting with standard script.
That said in a way it has also made small business assess if they should remain in business, as with some they only had cashflow because they where so behind with taxes, which at the end also puts to risk employee tax refunds and life insurance policies (when they do not pay staff super)
Hi Annalisa,
I hear your pain, and have numerous clients treading water at the moment.
Communications is the key – but it sounds like you realise that.
We all endure administrative hurdles in our business.
Your TAX or BAS Agent has fast code keys that allows them the option to access the ATO faster than you the business owner – I agree that may seem unfair, and I am not justifying it. As a BAS Agent I sorted out a payment plan for my client today, in about 10 minutes, the ATO answered almost immediately, and most of the time was spent on the ID check.
I guess that is the benefit of using a registered BAS Agent over a bookkeeper…again I appreciate that may seem unfair.
FYI I believe Angela Vithoulkas is on the ATO Small Business Advisory group.
Heather
Great points Anna, thanks for your post. I really feel for you and Janna and others that have to be the voice between the client and the system. Unfortunately I think it’s more that small businesses don’t have an option but to opt out when bills start to weigh them down. It’s such a shame considering the small business sector is such a dominant force in Australia.
Ooh there’s something I never knew Heather. Thanks for sharing.
Good post Annalisa,
One of the things we should keep in mind is that it shouldn’t be necessary to pay a tax agent or accountant to deal with straightforward issues with the ATO or any other government agency.
We desperately need tax simplification which was the original, and broken, promise of John Howard when he introduced the GST and BAS.
Sadly, neither side of politics seems to have any interest in delivering what would take a massive weight off small business and deliver real productivity gains to Australian business and society.
The funny thing is how successive Federal governments have slashed the ATO’s budgets so they struggle to keep up with the massive workload they’ve been given, which only makes it harder for both the taxman and us taxpayers.
Keep up the good work.
Cheers,
Paul
Yes, the Australian government should go out of its way to provide better support and understanding to small businesses.
As you say, you could easily have been a stay at home mum and simply enjoyed handouts from the government, rather than build a successful business AND provide employment for other mums too!
I’m completely gobsmacked that your legal costs weren’t fully covered when you succesfully won your case. What kind of justice is that?
Crazy…