Submission: Extension of AAT power to pause or modify ATO debt recovery


ARITA has made a short submission in relation to proposed amendments to the Taxation Administration Act 1953 to provide increased powers to the Administrative Appeals Tribunal in respect of small business tax decisions.

While ARITA is supportive of the changes to allow for:

  • stays on the Commissioner’s debt recovery actions in relation to tax assessments under dispute in the Small Business Tax Division of the AAT, and
  • small businesses to seek AAT orders that prevent the Commissioner from taking debt recovery actions, like commencing winding up proceedings or issuing garnishee notices, until the underlying dispute is resolved

the submission noted that care should be taken with the AAT ordering the Commissioner of Taxation to offer instalment arrangements, 50/50 payment arrangements and to accept security in lieu of immediate recovery. 

ARITA highlighted that if the small business is in financial distress, such arrangements can potentially expose the ATO to recovery action by a liquidator if the small business were to subsequently fail. We also believe that before offering such arrangements, the ATO should be considering the risks of non-compliance, failure of the business and subsequent recovery action and that the ATO cannot do such an assessment if the AAT orders particular arrangements be offered. 

Read ARITA’s submission