having an ATO debt doesn’t instantly prevent business owners from accessing business finance

don’t let an ATO tax debt stop your business from flourishing.

Paying taxes is a normal part of running a business. Incurring an ATO tax debt can put pressure on business finance, which is a reality for many business owners across Australia. However, this doesn’t automatically rule you out from achieving finance approval.

Many business owners are not aware there are business financing solutions that can take the pressure off your business as we approach another tax season. Now, we’re not going to bore you with a tonne of tax tips and advice – we’re finance experts, not accountants. In saying that, now is the time to speak to your finance broker and accountant. If you are planning on engaging an accountant, you need to do this before October 31^st.

If speaking to a bank or mainstream lender is not an option for you, or if you’ve been having trouble finding the right solution, there may be other suitable options available to you.

Tax-time is very stressful for many Australian businesses, so I spoke to a senior accountant about how to alleviate the stress tax-time imposes upon business owners.

tax tips

Here are some tips from Accountant & Broker David M Hilton, Director at DHC Group:

When businesses grow at a fast rate, the growth runs them short of cash. Debtor finance is well suited in these cases. Once the cash is collected the finance can be repaid.

Even if you don’t have a current tax arrangement in place, you may be able to negotiate an arrangement by working with your accountant to pay part payment of your ATO tax debt.

The added benefit is, you may also have additional tax benefits and concessions which are claimable by seeking business finance options, such as:

• The ability to claim depreciation tax deductions on interest expense (instant write-off or depreciate it over the useful life of the asset, such as equipment
• Small Business ‘Prepayment Concession’
• ‘Excluded Expenses’ which can be claimed instantly and don’t need to satisfy the 12- month rule
• GST refund of 10% GST paid on equipment at the time of purchase (portion used for business)
• FBT – non-monetary privileges or perks for employees
• ‘Temporary Full Expensing rule’ for various assets such as plant and equipment
• Speak to your accountant or finance broker to find out more about the tax-time concessions and benefits or visit the ATO website for more details.

Since the outbreak of COVID-19, the ATO has been quite flexible when assisting clients with payment arrangements. By talking it through with ATO and explaining your position, arrangements often can be made. Financiers can then see that the ATO debt is under control and may use this in part of their finance assessment process.

Thornmoney: a funding solutions tailored to your business

If you’re a business who invoices after you provide a product or service, you may have strong reason to speak with thornmoney now. Many small businesses, especially those in manufacturing, trade services, wholesale, and more, can use hidden assets on your balance sheet to assist with paying out your ATO tax debt or for other business purposes.

Thornmoney has debtor finance and invoice financing (or also known as line of credit) solutions to provide the cashflow your business may need this tax season. Visit our website for details.

* Any advice is of a general nature and you should consult with an independent advisor regarding your specific tax circumstances*