dsl-logo

Home Loans

Personal Loans

Car Loans

Business Loans

Credit Cards

Banking

dsl-logo
dsl-logo

Home Loans

Personal Loans

Car Loans

Business Loans

Credit Cards

Banking

Money news with Money Matchmaker®

The Money.com.au study on business tax payments

Written by

Shaun McGowan

About the study

Money.com.au sought to understand how the current recession would impact the ability of Australian businesses to meet their tax obligations. It conducted a survey of 261 Australian businesses – 88 per cent of which are SMEs – to ascertain how businesses paid their BAS and taxes before the 2020 pandemic. The survey asked business owners whether they pay their tax obligations in cash, whether they have ever gone on a payment plan with the ATO, taken out a business loan, or paid via credit card to get by, and how many times they have had to do this.

Money.com.au surveyed businesses across a range of sizes: SMEs (1-200 employees) and large (more than 200 employees), and across each State.

How did businesses pay their GST and tax obligations last year?

The results reveal that 25 per cent of businesses overall – and 21 per cent of SMEs – were unable to pay their GST and tax in cash, in full, in 2019. Among these businesses, 64 per cent – and 83 per cent of SMEs – mostly paid it through a repayment plan with the ATO or on a credit card. Sixty-five (65) per cent went on a payment plan or paid via credit card at least twice in 2019, and 16 per cent did so every time.

Looking across the different organisation sizes, among who did not pay their full tax obligations in cash every time, a staggering 57 per cent of large organisations had to secure financing to make their payments at least once in 2019, compared with 9 per cent of SMEs.

Be proactive about managing debt with Money Matchmaker

How often did businesses go on payment plans with the ATO, pay with a credit card or take out a loan?

Among businesses that had to go on a payment plan or use credit, 65 per cent did so at least twice in 2019. Between business sizes, 83 per cent of large organisations and 70 per cent of SMEs did so. Sixteen (16) per cent of businesses paid via payment plan or credit every time. Between business sizes, 33 per cent of large organisations, 25 per cent medium businesses and 13 per cent of small businesses did so every time.

Why are businesses struggling with their tax and GST payments?

Three in four (77 per cent) businesses cited cash flow issues as the major reason they were required to go on payment plans with the ATO or make payments via credit (e.g. a tax debt loan). For 43 per cent of businesses overall and 29 per cent of SMEs, cash flow issues stem from long-outstanding customer or client payments. A further 21 per cent said insufficient cash flow arose because the business spent beyond its means.

If a business does not engage with the ATO in relation to its tax debt, the ATO may disclose the debt to credit reporting bureaus, which could have an impact on the business owner's credit report.

Get help with your finances if you have bad credit with Money Matchmaker

About the Author

Shaun McGowan from money.com.au

Shaun

McGowan

Shaun McGowan

Shaun is the founder of Money.com.au and is determined to help people pay as little as possible for financial products. Through education and building world class technology. Previously Shaun co-founded CarLoans.com.au and Lend.

logo

Our Money Promise

Money Pty Ltd (trading as Money) Australian Credit Licence 528698 provides information about credit products and is authorised to do so as the holder of Australian Credit Licence 528698. Money does not compare every Lender all products or issuers available in Australia. We are not a broker or credit provider and when we provide information via this website, we are not providing you with a recommendation or suggestion about a particular credit product.

This material has been prepared by Money Pty Limited (ABN 40 664 954 536) (Money, ‘us’ or ‘we’). Money is a corporate authorised representative (CAR 001307399) of 62 Consulting Pty Limited (ABN 88 664 809 303) (AFSL 548573) (62C). The material is for general information only and is not an offer for the purchase or sale of any financial product or service. The material is not intended to provide you with financial or tax advice and does not take into account your objectives, financial situation or needs. Although we believe that the material is correct, no warranty of accuracy, reliability or completeness is given, except for liability under statute which cannot be excluded. Please note that past performance may not be indicative of future performance and that no guarantee of performance, the return of capital or a particular rate of return is given by 62C, Money, any of their related body corporates or any other person. To the maximum extent possible, 62C, Money, their related body corporates or any other person do not accept any liability for any statement in this material.

The calculator provided on money.com.au is intended for informational and illustrative purposes only. The results generated by this calculator are based on the inputs you provide and the assumptions set by us. These results should not be considered as financial advice or a recommendation to buy or sell any financial product. By using this calculator, you acknowledge and agree to the terms set out in this disclaimer. For more detailed information, please review our full terms and conditions on the website.

Assumptions:

  • The calculations do not account for changes in interest rates or other market conditions that may occur.
  • Results are approximations and may differ from actual payment schedules or amounts.
  • The calculator does not include all fees and charges that you may incur in relation to a financial product.

Limitation

  • This calculator does not guarantee the availability of any financial product or the accuracy of the calculations. Please consult a financial advisor or the relevant product provider to obtain specific advice tailored to your circumstances.
  • money.com.au does not accept any liability for errors or omissions, or for any loss you may suffer as a result of relying on these calculations.
Money Pty Ltd trading as Money

ABN: 42 626 094 773 / ACL: 528698 / AFCA: 83955
Money is a corporate authorised representative (CAR 001307399) of 62 Consulting Pty Limited (ABN 88 664 809 303) (AFSL 548573) (62C)
aboriginal-and-torres-strait

Money acknowledges Aboriginal and Torres Strait Islanders as the traditional custodians of country throughout Australia and their continuing connection to land, waters and community.

© Copyright 2024 Money Pty Ltd.