Diamond Accounting

The ATO has announced measures to assist businesses which are in financial distress including:

 a 12 month general interest charge (GIC) free payment arrangement for struggling businesses; and

 deferral of the payment due date on activity statement liabilities.

If the ATO agrees to a GIC free payment arrangement, GIC will be remitted for a maximum period of 12 months. There is no limit on the amount of debt permitted under the arrangement.

Who is eligible?

To be eligible a business must have an annual turnover of less than $2 million and have an activity statement debt.

How to apply?

Until 30 June 2010, businesses can apply to the ATO for a GIC free payment arrangement. Eligible businesses will need to negotiate a payment arrangement with the ATO. What does the arrangement apply to? The GIC free payment arrangement can apply to activity statement debts (eg GST, PAYG).

The arrangement can apply for a maximum of 12 months from the day on which the arrangement is entered into. The GIC-free period:

 starts on the day on which the agreement was made with the ATO; and

 finishes on the day the final instalment is due (unless there is a default under the arrangement).

TIP

Businesses that are struggling in the current economic climate may want to approach the ATO to negotiate a payment arrangement.