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  • Mohammed Rafiq

Organising Payment Plans If Your Tax Debt Is Less Than $100K

All taxpayers in Australia have the duty to pay the correct amount of taxes on time. In situations where you are unable to pay on time, you may have some payment options depending on the amount of taxes you owe the ATO.

Lodging activity statements and tax returns

Individuals and businesses are required to lodge their activity statements and tax returns on or before their deadlines, whether or not they can pay their tax obligations by the due date. By lodging on time, the taxpayer will not only avoid penalties for the delay or failure to lodge on time but will also show the ATO an awareness of their obligations and best efforts to meet them.

Payment plan for tax debts

The ATO has developed an automated payment plan to help individuals meet their tax debts that do not exceed $100,000. The payment plan uses an online payment plan estimator which can calculate the amounts a taxpayer can pay in instalments that they can afford. The estimator can also help the taxpayer determine how quickly they can pay off a tax debt and the amount of interest charged for it. Take note that a longer period of payment will lead to higher interest charges.

Conditions of the tax payment plan

In addition to lodging tax returns on time, it’s important to know that:

  • Tax credits and refunds that may be due to the taxpayer will be used to reduce their tax debt but will not replace a required instalment payment;

  • The deferred payment of the tax debt will incur a general interest charge which will continue until the debt is fully paid;

  • Taxpayers whose finances may improve in the meantime are allowed to make additional payments or pay off their debts at any time.

To set up the online payment plan, the taxpayer will need a myGov account linked to the ATO.

For tax debts higher than $100,000

For taxpayers who are unable to settle their tax debt of more than $100,000, their option is to call the ATO on 13 11 42 to discuss available payment plans, on contact our team at ATP Tax Consultants for further direction.

Getting help for tax payments

Dealing with tax payments should be every taxpayer’s priority as interest charges and penalties can grow over time, making it even more difficult to settle one’s tax bill. If you are experiencing financial challenges and foresee difficulty in meeting your tax obligations on time, talk to an experienced tax consultant about your issues immediately.

At ATP Tax Accountants, our team has years of experience in helping Western Sydney's business owners, professionals, and self-employed individuals manage their tax obligations by determining the correct value of taxes that they must pay and by providing advice to help them settle what they owe the government.

We invite you to call us today or contact us online at 1300-829-484 to discuss your particular circumstances.

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