Set up a tax repayment plan tailored specifically to your circumstances, handle dealings with the ATO on your behalf, give you peace of mind knowing that you are on the right path, and make moves to minimize tax liabilities where possible. The ATO has created payment plans to assist struggling individuals and businesses, so if you are struggling with tax debt, ask about one.
You can make single payments using a credit card, or use any other available payment options to make payments to the ATO. If, at some time in the payment plan period, you discover you cannot make a payment on one installment, please contact the ATO before your due date, and you may be able to adjust the installment amount or the due date. We recognize that it may be difficult at times to make full payments on a due date, however, you may be able to establish a repayment plan so you pay off the debt in small, manageable payments over a set timeframe. When you are setting a regular payment amount, keep in mind that you should pay off any amounts you owe within the shortest period possible, allowing any future tax obligations to be paid off before the due date.
There are qualification criteria, but in general, you will need to have a good history of filing and paying taxes, and the amount owed on an activity statement should be under $50,000. Small businesses with less than $2 million in revenue, activity statement debts less than $50,000, less than 12 months, and a good record of filings and payments can pay the debt over 12 months without interest. Small businesses owing amounts on their activity statements may be able to pay over 12 months interest-free. We will not try to put you into bankruptcy if it is clear that you are capable of paying the debt within a reasonable period.
We will have to file an application with the ATO on your behalf, as well as provide other information, to show you can eventually pay the tax debt, and that you have made reasonable efforts to come up with funds. If you are having difficulties paying the tax debt, a repayment plan may be arranged with the ATO to mitigate those difficulties. In the time between not being able to make a payment and the ATO commencing collection actions, you can take steps to avoid unintended outcomes. If you choose instead to ignore your tax obligations, the ATO may pursue actions against you that are likely to put you in a worse position.
The ATO agrees to refrain from engaging in collection activities while you continue to meet your obligations under the Agreement. If you are unable to fulfill your obligations, the ATO will evaluate whether your business is viable and whether you should continue operating. Where applicable, the ATO will provide additional time for you to file tax returns, repay your tax debts with no fee or by installment, and waive any penalties or interest depending on your circumstances. If you fail to agree to a payment plan and keep leaving tax debts unpaid, the ATO can recoup the amount owed from future refunds or credits, or bring in an outside collection agent.
In times such as these, Australian Taxation Office (ATO) Tax Payment is a plan to repay the debt by installments can be an option. For example, a payment plan estimate would only work if you could make one large payment upfront (10% of debt over seven days). The ATO offers a Payment Plan Calculator that can help give you an idea of how long the debt is going to take to be paid off, or how much it needs to be paid over a fixed time frame (ask us about this calculator). The ATO can take a range of actions depending on the taxpayer, type of debt, and the size of the debt, though generally, the ATO has favored forbearance when providing payment plans for struggling taxpayers with smaller amounts owed.
The ATO can allow taxpayers to pay tax liabilities by installments through payment arrangements, whether the liability has elapsed or not.1 ATO Payment arrangements do not change the timing of when the tax liability is due and payable.2 In Clifton (Liquidator) v Kerry J Investment Pty Ltd, trading as Clenergy3, the Federal Full Court confirmed that payment arrangements do not result in a tax debt which is owed to stop being owed. While a payment arrangement with the ATO is in effect, you are required to lodge all future returns on time and pay any associated tax liabilities in full, or the arrangement automatically ceases. If you eventually receive tax credits or a refund at a later date, this will be used to reduce the debt, but you still have to make your required installment payments. A tax debt loan can be used either to settle your debt or provide a down payment to set up a payment plan, and interest may even be deductible.
When it comes time to make payments, there are many ways to make payments, whether that is by money order, credit card or debit card, BPAY, or another option. If your problem is straightforward, or you are comfortable working out a payment plan without speaking with a representative, you can arrange it through the Automated Telephone Payments Online service, and they will be able to assist in setting up a payment plan for installments.