CHEAP, CHEAP CREDIT—OR IS IT?
Many advisors would be aware the Australian Taxation Office (ATO) has taken a very cautious approach to debt collection since the global pandemic's start. We could go as far as suggesting the ATO is being very accommodating.
While on the face of it, an ATO payment arrangement may look appealing, several reasons urge us to caution your clients from immediately appealing to the ATO for extended repayment arrangements. In years gone by, we would often muse, why wouldn't you enter into a repayment arrangement with the agency often affectionally labelled the 5th major bank? After all, in those years, the interest rates were reasonable, no application forms or guarantees were required, and usually “the deal” was not that hard to do—and the ATO did not require real property security. Suffice to say, much has changed.
