An investigation will discover how the ATO pursues the early recovery of tax debts from small businesses with which it’s in dispute.

Australia’s small business minister has asked the small business ombudsman to investigate Australian Taxation Office processes.

The Minister for Small and Family Business, Michaelia Cash, wants the ombudsman, Kate Carnell to look at how the ATO pursues the early recovery of tax debts from small businesses that are in dispute with the ATO.

“I am determined to make sure the Australian Tax Office treats small business fairly,” Ms Cash said.

“Early recovery can be devastating for a small business, and is particularly damaging when the small business disputes the recovery and then goes on to win the case.”

Ms Cash has told the ombudsman to look into the extent of the problem and its impact on small businesses. The focus will be on historical cases, not live cases.

“I want to ensure that the Australian tax system is fair for small business,” she said.

“Although I understand that the ATO will not enforce recovery of the tax debt other than in exceptional circumstances, there may be cases where the errors have occurred, and this has substantial consequences for these businesses, which needs to be avoided.”