Our approach takes account of the reasons you have arrived at the position of being in arrears and uses our skills and expertise to negotiate around the guidelines of what the ATO would view as a reasonable plan for paying tax arrears. Once we have analysed your tax debt, as well as your business and financial circumstances, we can put together for you a manageable, realistic plan to pay your ATO, including detailed cash flows and budgets. Time and again, we come back with a tailored ATO debt repayment plan based on the cash flow needs of our clients, which allows you to pay off the debt in a way that is convenient to you. An ATO payment plan is a financial assistance agreement that allows any existing debts you have with the ATO to be paid off over time, through instalments, instead of being paid off in a lump sum.
Anyone with debt with the ATO is entitled to join a payment plan, however, there are some circumstances in which they will require additional information before approval. If your information does not completely comply with the ATOs policies, the ATOs debt repayment plan will either be rejected, or the terms of the repayments will not be appropriate. To avoid receipt, it is important to work with the ATO and agree on a mutually agreeable debt tax plan that will not expose your debt information. If you cannot agree on a repayment plan with the ATO, the ATO may consider accepting security, such as registered mortgages or bank guarantees, in return for allowing your debts to defer.
The ATO is very open to setting up a payment plan with you, provided that your tax liability is not already past due. You may set up a payment plan with the ATO for unpaid business tax liabilities. The ATO may hand over your unpaid business tax debt to an outside collection agency, leaving it to you to manage the collection process. Meeting business tax obligations is a critical compliance item for businesses, and unpaid tax debts can spiral out of control, leaving your organization exposed to action by the ATO.
If you are unable to meet obligations, the ATO will evaluate whether or not your business is viable and whether or not you should stay open. Do not try to cheat the ATO in any way, because if your company cannot meet its tax liabilities, and the ATO does shut it down, you are going to get under a lot of scrutinies. Do not hide behind a company’s debt, the ATO may find you personally responsible as the company’s director. Like it or not, the ATO is a stakeholder in your company once it has a debt to the ATO, and should be treated accordingly.
An expert can determine aspects of your debt that could cause problems and can assist you to deal with ATO appropriately. The ATO suggests contacting the ATO if you are feeling overwhelmed or are struggling with mental health issues that are affecting your ability to budget and/or repay debt. If paying a tax debt will put you in serious difficulties, such as not being able to afford food and housing for yourself or your family, contact the ATO to discuss your circumstances. If you owe a tax debt, and you know that you cannot meet it before the due date, you should contact the ATO immediately.
If a customer has tax debt that is not paid in full, the ATO allows customers to repay that tax debt over 24 months. If the amount of tax debt is very high, ATO will even require a 30% advance, with the remaining balances required to be paid within 24 months. If you are falling behind on your payments to the ATO, then the total amount owed on your plan becomes payable. It is important to note, though, that you must make the payments you are owed when they come due, according to the realistic repayment plan, otherwise, the ATO may take action to collect the debt.
In times such as these, a repayment plan with the Australian Taxation Office (ATO) for paying off debts in instalments could be an option. Depending on the size of your debt, and if you are falling behind in payments, the ATO can move fast to place a foreclosure lien against your property. For larger debts, the ATO will typically require some form of evidence from us that you are capable of complying with your settlement. An ATO tax payment plan is unlikely to be considered if not all filings are current, and the ATO is likely to want to make sure that not only is what is being offered affordable, it is the maximum that a taxpayer who is in debt to the Tax Office is capable of paying.
The ATO will occasionally permit directors to negotiate a payment arrangement that allows ATO debts to be paid over time, in smaller amounts, with no interest or penalties. The ATO may be able to offer no-interest payment arrangements to small businesses that have a liability under an activity statement. In contrast, taking out a business loan to repay the tax debt will ensure that you stay on top of repayments, with no worries that the ATO will come calling for payment.
A hold-up could occur if you have at least $10,000 of tax debt which is 90 days or more behind, and where you are not engaged with the ATO for at least $10 of that. While the ATO recognizes negotiation of payment arrangements is done on an individual basis, poor records with prior tax debts may become an obstacle to negotiations. If you have not lodged your BAS returns, have failed to make scheduled PAYG/SGC payments, or are in a repayment plan agreed to by the ATO, be particularly cautious as you could be personally responsible for the company’s tax debts, without even knowing.