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Dispute Resolution Easier For SMEs

Resolving tax disputes can be a long and laborious process. But the accounting industry has welcomed a move by the Federal Government to make tax dispute resolution easier, cheaper and quicker for small businesses with the Australian Taxation Office (ATO).

It will establish a Small Business Concierge Service with the Australian Small Business and Family Enterprise Ombudsman’s office to provide support and advice about the Administrative Appeals Tribunal (AAT) process to small businesses before they make an application. The government will also create a dedicated Small Business Taxation Division with the AAT. The key features of this division includes:

  • A dedicated case manager supporting them throughout the process
  • A standard application fee of $500
  • Decisions made within 28 days of a hear, which the ATO has determined as fast-tracked
  • Where the ATO appeals the AAT decision to the Federal Court, it will pay the small business reasonable costs

This move was warmly welcomed as small business debt accounted for more than $12 billion in debt in the 2017-18 financial year. And rather than small business owners simply ‘giving up’, this move has lightened the burden of tax disputes through the capping of cost and time efficiency. However, people would argue that this method is simply a case of too little, too late.

Looking into this process in more detail, it can be seen that a dispute needs to be quite escalated before it reaches the AAT. This means that small businesses would have felt financial pressure long before the case reaches the Small Business Taxation Division. So perhaps a system that has intervention earlier on, before ‘the going gets tough’, would be more beneficial to small businesses.

Needless to say, this is definitely a step in the right direction, but more action can be taken to avoid financial pressures of tax disputes becoming to burdening.

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