New ATO small business chief offers olive branch to SMEs after leading raids on suspected GST fraudsters

The Australian Taxation Office’s (ATO’s) new small business chief has urged those with unpaid debts to come forward and ask for help, offering a gentle touch just months after leading raids on 19 people suspected of GST fraud.

The ATO website this week published a Q&A with senior tax office figure Will Day, who recently became deputy commissioner of small business after overseeing the crime-chasing Integrated Compliance team and the Serious Financial Crime Taskforce.

In his remarks, Day reflected on the ATO’s decision to normalise its debt collection activities after it showed leniency to struggling businesses through the worst of Australia’s COVID-19 lockdowns.

Since the harshest business restrictions came to an end earlier this year, the ATO has ramped up its issuance of director penalty notices to company leaders with outstanding debt obligations.

However, Day says there are still opportunities for struggling firms to work with the tax office in good faith.

“I think most people in the community would understand that the ATO has an obligation to collect what it is owed,” Day said.

“I really want to point out though that we’re still committed to engaging with small businesses about unpaid debts, and are offering tailored support and assistance to people with overdue payments.

“We’re here to assist.”

While Day says the tax office is willing to find solutions for hard-hit businesses, the appointment of a senior compliance figure to the SME role suggests the ATO plans to aggressively root out malpractice in the small business space.

“Because of my background, I’ve also got a powerful interest in making sure that there’s a level playing field for all of those small businesses that do pay their fair share,” Day said.

“That means I’ll be looking closely at activities in the shadow economy.”

Day has pedigree in this area: in June, as chief of the ATO-led Serious Financial Crime Taskforce, Day was involved in the Australian Federal Police-led raids of 19 individuals suspected of GST fraud.

The raids took place in 12 locations across NSW, Victoria, Tasmania, South Australia, Western Australia, and Queensland.

“For those that have already committed this fraud, we know who you are, and you will need to repay the fake refunds you have obtained,” Day said at the time.

“You could face severe consequences, including jail if you do not speak to us before we knock on your door. Come forward now or face potentially tougher penalties.”

The ATO has repeatedly warned that GST fraud is high on its priority list.

In June, the tax office put estimated 70,000 people on notice for allegedly providing falsified business activity statements, and claiming $1 billion in fraudulent GST refunds for businesses which simply did not exist. 

“This is a clear warning to individuals considering participating — you will not be successful, you are not anonymous, and you will face the consequences of your attempts,” Day said at the time.

Derspite that hard-hitting pedigree, Day used his latest Q&A to offer an olive branch to small businesses endeavouring to do right by the tax office.

“The great news is that the majority of small businesses do the right thing,” he said.

“My job is to help them continue doing so.”