If you are a business owner in Australia, it is likely that you would have heard about the Voluntary Agreement Income ATO (Australian Taxation Office). It is an initiative taken by the Australian government to help businesses who are struggling financially due to the COVID-19 pandemic. In this article, we will discuss what a Voluntary Agreement Income ATO is, how it works, and who is eligible for it.
What is a Voluntary Agreement Income ATO?
A Voluntary Agreement Income ATO is an arrangement between the Australian Taxation Office and businesses that are having difficulty paying their taxes. It is a voluntary agreement where businesses can negotiate a payment plan with the ATO to pay their outstanding taxes over a period of time. This agreement helps businesses to manage their cash flow and avoid the risk of insolvency.
How does it work?
Businesses can apply for a Voluntary Agreement Income ATO by contacting the ATO directly. The ATO will then assess the business`s financial situation and determine what payment plan will be best for them. The payment plan will be based on the business`s ability to pay their outstanding taxes, and will be structured to suit their cash flow.
The ATO will also waive any interest and penalties that may have been incurred, providing that the business adheres to the payment plan. Businesses will need to ensure that they make their payments on time and in full, otherwise they risk defaulting on the agreement.
Who is eligible for Voluntary Agreement Income ATO?
The ATO has designed the Voluntary Agreement Income ATO for businesses that are experiencing financial difficulties due to the COVID-19 pandemic. To be eligible for this agreement, businesses must meet certain criteria.
Firstly, the business must have an annual turnover of less than $50 million. Secondly, their financial difficulties must be due to the impact of COVID-19. Finally, the business must be committed to paying their outstanding taxes and adhering to the payment plan.
In conclusion, the Voluntary Agreement Income ATO is a useful initiative for businesses that are struggling financially due to the COVID-19 pandemic. It provides an opportunity for businesses to manage their cash flow and avoid the risk of insolvency. If you are a business owner in Australia and are experiencing financial difficulties, it is worth contacting the ATO to see if you are eligible for this agreement.