ASBFEO applauds review of compensation scheme for small business

The Australian Small Business and Family Enterprise Ombudsman, Kate Carnell, said she welcomes the review of the Compensation for Detriment caused by Defective Administration (CDDA)Scheme, focusing on the Australian Taxation Office’s (ATO) treatment of small businesses.

“If a small business suffers detriment as a result of defective administration by a government agency, the CDDA scheme allows for that agency to pay discretionary compensation where there is no legal requirement to do so,” Ms Carnell said.

Last year, the ASBFEO provided input into the investigation of the ATO following allegations of unfair treatment towards small businesses.

“Our own research into unfair treatment by the ATO at that time found serious system-wide issues impacting the sector.

“We found a fundamental denial of access to justice for small businesses due to heavy-handed practices and erratic changes in approach,” Ms Carnell said.

She noted that, coupled with a lack of independent review and delays on decisions, this has meant devastating financial consequences for small businesses.

The ombudsman said the ATO’s introduction of independent internal review last year for disputed cases was a good outcome for the sector and its small business area is actively working with small businesses to ensure they are able to meet their tax obligations.

“A new Small Business Taxation Division within the Administrative Appeals Tribunal and our own Small Business Concierge Service, both to open on 1 March, will also help small businesses with ATO disputes,” Ms Carnell said.

“Our Concierge Service will provide advice directly to small businesses in dispute with the ATO.

“We look forward to contributing to this review to ensure small businesses have access to fair and transparent treatment of their tax disputes.”