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New measures to assist small businesses to meet their tax payment obligations

Small Business Tax BreakOn 1 June 2009 the Tax Office introduced new measures to help small businesses that are struggling to manage their tax payment obligations in the current economic climate.

Twelve-month general interest charge (GIC) free payment arrangements

Businesses with an annual turnover of less than $2 million and an activity statement debt can apply for a GIC-free payment arrangement from now until 30 June 2010.

GIC will be remitted for a maximum period of 12 months, provided the payment arrangement is maintained.

There is no limit on the amount of debt under arrangement.

Who is eligible?

To be eligible a business must:

  • have an annual turnover of less than $2 million
  • have an activity statement debt, and
  • negotiate a mutually acceptable and sustainable payment arrangement with the Tax Office that is entered into between 1 June 2009 and 30 June 2010.

How does it work?

  • The GIC-free period applies to activity statement debts (eg GST, PAYG).
  • Superannuation guarantee charge (SGC) debts are not included as the GIC forms part of the employees’ entitlements.
  • No GIC is payable for a maximum of 12 months from the day on which the arrangement is entered into.
  • The actual GIC-free period (maximum of 12 months):
    • starts on the day on which the agreement was made, and
    • finishes on the day the final instalment is due.
  • If the arrangement defaults, the GIC-free period ends on the date of default.
  • If a payment arrangement entered into prior to 1 June 2009 is renegotiated after 1 June 2009, the new arrangement will be treated as a GIC-free payment arrangement subject to the eligibility criteria being satisfied.

How do I apply?

Phone the ATO on 13 11 42 from 8.00am – 6.00pm Monday to Friday.

If your debt is less than $25,000 you can use their automated self help service to apply for a payment arrangement by calling 13 72 26. Their self help service operates 24 hours a day, seven days a week.

Source: ato.gov.au

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