I don’t know why the ATO continues to have a distressed debtors ledger when it has access to live data. Perhaps it’s not their doing, but the indecisiveness of the politicians to have implemented the full-version of single touch payroll including payment of superannuation and PAYGW at the same time as payroll.
In the meantime, Small Business Reconstruction (SBR) is emerging as a crucial lifeline for small businesses facing financial distress. SBR offers a commercial and ethical approach for potentially viable small businesses and their owners to extinguish ATO debt. Not only is the process cost-effective, but it also allows business owners to retain control throughout the entire journey and emerge from restructure as viable profitable businesses.
The $35 Billion Problem Facing Australian Small Businesses
If you’re a small business owner struggling with mounting tax debt, you’re far from alone. The latest figures from the ATO show small businesses now account for a staggering $35.6 billion of Australia’s total collectable debt. With increased enforcement measures, including court wind-up applications and director penalty notices (DPN), it might feel like the walls are closing in.
But here’s the good news you might not have heard: there’s a lifeline designed specifically for businesses like yours.
What Is This SBR Thing Everyone’s Talking About?
Small Business Restructuring (SBR) might sound like another piece of corporate jargon, but it’s actually a practical pathway that’s helping real businesses survive and thrive. Imagine being able to:
- Keep running your business while you sort out your debts
- Negotiate a realistic payment plan that creditors actually accept
- Clear away unsustainable debt that’s been keeping you up at night
- Do it all in just two months
The Numbers Don’t Lie: SBR Works
The ATO is approving 91% of SBR proposals. Yes, you read that right, the same ATO that’s owed billions is saying “yes” to restructuring plans that work for both sides.
Take the case of a small café. Facing $180,000 in unpaid taxes and $20,000 in other debts, they proposed a $40,000 repayment plan. The result? Creditors received 20 cents on the dollar, far better than the zero they’d get in liquidation, and the café kept its doors open.
Could Your Business Qualify? Three Simple Checks
Before you get too excited, let’s see if your business is eligible. You’ll need:
- Total liabilities under $1 million
- Employee entitlements (including super) up to date (or a plan to get there)
- Tax lodgements current (or a commitment to fix them)
How Does It Actually Work?
The process is surprisingly straightforward:
- You appoint a Small Business Restructuring Practitioner (like us) who helps prepare your plan
- You keep running your business while we work on the proposal
- Creditors like the ATO vote on your plan
- If approved, you follow the plan and the remaining debt is extinguished
The best part? This usually wraps up in about two months, unlike traditional insolvency processes that can drag on for years.
Why Now Is the Time to Act
With the ATO ramping up debt collection and economic pressures continuing, waiting is the riskiest strategy of all. The businesses that act early have the best chances of securing a workable plan that satisfies creditors.
Your Next Step Is Simple
If you’re wondering whether SBR could work for your business, don’t waste time trying to figure it out alone. Our team at Levi Consulting has guided businesses across all sectors through successful restructuring.
A confidential discussion costs you nothing but could save your business. Contact David Levi on 0418 602 466 today.
Comments are closed.