Although the Prime Minister’s address to the nation last Wednesday night had little details on measures that might be implemented moving forward to counter the fuel crisis, the Federal Treasurer did announce ATO measures to assist businesses impacted by the increasing fuel prices.

It seems to indicate a recognition by the ATO of the changing economic climate and a change in philosophy which harks back to the COVID times when the ATO promised to work with business and not engage in aggressive debt pursuit actions.

At this stage, the main relief is only available for taxpayers that can prove they have been impacted by high fuel prices. The business must have experienced an increase in business operating costs that are attributable to the high fuel costs. They must have a new tax debt or be unable to serve an existing tax debt due to a reduced capacity to pay resulting from the higher fuel prices. The ATO does point out this is different from general downturns in business or ordinary cash flow issues. Finally, it is also crucial that all lodgments are up to date.

If a business is eligible, the ATO measures available include: 

– Remission of general interest charges and other penalties

– Variation of PAYG instalments to match the reduction in taxable income

– Longer payment plan terms that require no upfront payment (usually 36 months)

These measures at this stage are available until 30 June 2026 but further support may be provided if conditions continue to deteriorate.

Finally, the ATO has also provided guidance for those businesses who are not eligible under their fuel response measures. The ATO has said that these businesses should: 

– Pay their employees’ wages and superannuation payments first

– Pay other creditors (I.e. businesses) so they can meet their employee commitments

– Keep up to date with lodgements and if due a refund, lodge as soon as possible

– If ATO debt is owed, pay what you can as soon as you can and set up a normal payment plan if required

Overall, these measures are a practical response from the ATO and indicate they are aware of the challenging conditions for businesses. We recommend that clients continue to lodge their commitments on time and communicate any cash flow difficulties to the ATO. If your business has been impacted by the fuel crisis or you need assistance with your tax commitments, please do not hesitate to contact us.