If you’ve experienced tax debt in the past, then you understand better than most the financial strain that it can put on your business. Once you’ve discharged the debt, the goal has to be to avoid ending up with tax debt again. And yet so many businesses manage to drag themselves out of a hole only to go back in again and need tax debt help for a second time.

It is so important to learn from past mistakes and develop effective strategies to prevent a recurrence of tax debt. This is where EPAS comes in. Not only do we assist businesses get control of their tax debt and discharge it in a way that doesn’t adversely affect their business, but in the process we will also audit your business to come to an understanding of what has caused the debt in the first place. From there we will provide expert guidance on how to avoid it happening again. 

In general, the best approach to preventing your business for falling into the tax debt trap a second time is:

1. Learn from past mistakes:

One of the most critical steps in avoiding recurring tax debt is a thorough analysis of past mistakes. The first thing that we do with our clients is understand the root causes that led to the previous tax debt and identify areas of weakness in their financial management, compliance, and record-keeping processes. This analysis should be comprehensive, and we’ll work with all your key people to come to this understanding.

By identifying and acknowledging the past missteps, businesses can develop a clear understanding of what went wrong and implement effective measures to prevent repeating those errors. This self-awareness is crucial for building a solid foundation to prevent future tax debt issues.

2. Implement strong financial management practices:

Once you know what went wrong, the next step is to make sure that you put the mechanisms in place to make sure it doesn’t happen again. This means you need a robust financial management system. You need to keep accurate and up-to-date records for tracking financial transactions, income, and expenses. Oftentimes we find that our clients need to simply use better accounting software or engage with us on an ongoing basis, because they were trying to do their accounts themselves and that was outside of their area of capability.

The budget is part of this. We will work with you to craft a budget and financial plan to ensure they have sufficient funds available for tax obligations while still being able to continue business as normal. By closely managing your finances with the discipline that we will bring to your business, you will be better positioned to avoid the temptation to use tax funds for other purposes, which can lead to cash flow issues and potential tax debt.

3. Comply with tax laws and regulations:

Strict compliance with Australian tax laws and regulations is vital for preventing tax debt. Staying up to date with any changes in tax rules that may impact the business is essential. But you don’t need to take this on yourself! Your own time is better spent dedicated to the business, while experts like the team at EPAS will support you in staying across the ever-shifting tax landscape.

We’ll also make sure that you get your lodgements in in time. Timely lodgement prevents late penalties and interest charges, which can quickly accumulate and lead to tax debt.

4. Develop a tax planning strategy:

Leveraging the expertise of the EPAS team and engaging in proactive tax planning is a crucial aspect of preventing tax debt. Businesses should develop a tax planning strategy to forecast tax liabilities and optimise tax deductions and incentives. Regularly reviewing and adapting the strategy based on changes in business circumstances and tax laws is essential to its effectiveness.

5. Establish internal controls:

Finally, putting in place internal controls and oversight mechanisms is vital to prevent financial mismanagement, errors, and fraud. Businesses should establish procedures to ensure that financial processes, including tax-related matters, are carried out accurately and efficiently. You’d be surprised just how often a lack of oversight into the accounting at a business allows human error (or malicious intent) to drag an otherwise healthy company into a deep pool of tax debt.



One of the strategic areas where EPAS will help your business is in encouraging a culture of transparency and open communication within the organisation. Employees should be encouraged to report any potential tax-related issues or concerns promptly, ensuring that problems are addressed before they escalate into tax debt situations.

None of this needs to be difficult or stressful. A lot of business owners lose sleep and stress about interacting with the ATO on any level, but getting on the front foot is the best strategy for preventing your business from falling into tax debt a second time. 

By learning from past mistakes, implementing strong financial practices, adhering to tax laws, developing a tax planning strategy, and establishing internal controls, businesses can build a solid foundation for financial stability and avoid falling into tax debt a second time.

Remember that EPAS is here to help you, not only in that emergency stage when you need tax debt help the first time, but also to help you to restructure your business so it never happens again. Most of our clients continue to use us for years after their business has been returned to a healthy position, simply because we’re just as effective at preventative accounting as we are at emergency accounting. Contact us today to get started right away!