A business owner in Marysville, Victoria, was the first business owner in Australia assisted by the Australian Taxation Office to reconstruct their records following a natural disaster – the Black Saturday bushfires in 2009.
Since that time over 500,000 businesses affected by natural disasters, including Cyclone Yasi and the recent floods in Queensland and other parts of the country, have been helped by the ATO.
Assistant Treasurer Bill Shorten welcomed the release by the Tax Commissioner of a 'practice statement' explaining the ATO's response to disasters.
"In recent years many Australians have been affected by natural disasters and the ATO has consistently and publicly stated its intention to provide assistance to taxpayers affected by those disasters," Mr Shorten said.
This practice statement sets out how the ATO goes about helping taxpayers affected by disaster to reconstruct records, which may help in re-starting the business, tracking invoices and receipts and to make reasonable estimates for the purposes of lodging tax documents and returns.
The ATO's assistance includes help with prior year lodgements. The ATO relies upon records held by the taxpayer, third party intermediaries and some of its own information to assist in this process.
"The ATO helped the business owner in Marysville reconstruct her records that allowed her to apply for a loan to help her quickly get the business up and running again, budget for the future and lodge her business activity statement."
The ATO did that by providing copies of the previous three years' income tax returns and business activity statements. These were used, along with bank statements, to make the reasonable estimate of her income and expenses.
"This is a practical example of the beneficial use of the Tax Commissioner's discretion and understanding in dealing sensitively and helpfully with those affected by disasters," Mr Shorten said.
"The practice statement will help entrench this approach across in the ATO."
"The Government provides significant assistance to people in the aftermath of natural disasters. This is one very practical way of helping business owners get back on their feet, which is good for them, good for their community, good for the economy and, of course, good for the revenue base," Mr Shorten said.
Practice Statement (PS LA 2011/25) is available on the ATO website at www.ato.gov.au.