The Federal Government’s tax amnesty for Australian small businesses comes at the right time as new data shows a 25% increase in insolvencies already this financial year. As earlier announced in the federal budget, the Australian Tax Office (ATO) has pledged to scrap failure-to-lodge penalties for some small businesses with an annual turnover of less than $10million.
Why tax amnesty is a timely policy?
This is great news for Australian SME’s that have accrued a tax debt during the COVID years. At the request of the Coalition government, the ATO allowed Australian businesses to not pay BAS and PAYG during that time which resulted in $30billion of unpaid taxes. This amnesty will allow businesses that are struggling with rising interest rates and restricted access to capital in a high inflationary environment to implement a payment plan for accrued taxes.
But it is essential business owners engage with the ATO rather than take a ‘head in the sand’ approach hoping they won’t come knocking. The reprieve comes as new data from ASIC shows 6,144 Australian businesses have already been placed into administration this financial year – a 25% increase already on last year despite the year not being over yet.
NSW has seen the highest number of administrations with a 77% increase from April 2022 to April 2023 – from 1422 to 2520. Victoria has jumped from 995 to 1665 in the same period, Queensland 720 to 1133 and South Australia 164 to 238. It’s been a tough time for Aussie businesses with inflation, rising costs, tax collection and traditional bank finance drying up.
How OptiPay can help your business
We’ve had a huge spike in broker-driven enquiries as access to capital becomes more difficult. OptiPay specialises in invoice financing – a revolving line of credit against unpaid invoices – to improve business cash flow. Any business that invoices another business for goods or services on credit terms is a good candidate for invoice financing. Businesses can typically access up to 90% of their sales revenue within 24 hours of issuing the invoice.
Unlike business loans there are no ongoing repayments to service as the financier is repaid when the debtor makes payment of the invoice/s. The fee paid to the financier usually ranges from <1% up to 3% of the invoice value. All OptiPay facilities come with Trade Credit Insurance to protect our customers in the event of insolvency of their clients. Cash flow is everything for a business and in this economic times it’s even more important it’s maintained.
Angus Sedgwick is the Chief Executive Officer of OptiPay.
