Small business tax relief

In a recent speech Michael D’Ascenzo, Commissioner of Taxation announced new measures to help small businesses that are having difficulty paying their tax debt:

  • The ATO is providing a 12 month general interest charge (GIC)-free payment arrangement for all businesses with an annual turnover of less than $2 million who have an activity statement debt. For these businesses, payment arrangements (activity statement and income tax) negotiated from 1 June 2009 until 30 June 2010 will have GIC remitted for the period the payment arrangement is maintained (up to a maximum of 12 months).

  • The ATO is providing an interest-free deferral of the payment due date on activity statement liabilities: a deferral of up to two months can be granted for quarterly and annual payers and up to one month for monthly payers

  • The Government has proposed to reduce the GDP uplift factor from 9% to 2%. This reduction will provide cash flow benefits to around 1.5 million eligible small businesses, individuals, trusts and small superannuation funds, by ensuring that their PAYG instalment amounts for the 2009-10 income year more closely reflect their actual income tax liability for that income year.

  • Businesses can vary their instalments downwards in line with their likely end of year tax performance.

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