Setting up an ATO Payment Plan for Tax Debts

There’s a lot of talk in the business and accounting worlds at the moment regarding small business tax debts and the ATO’s chasing up of these debts.

If you need to pay off your tax debt but aren’t sure how you’re going to pay it off in time, you may be able to apply for a payment plan with the ATO for up to 24 months

If you can’t pay your tax obligations on time, it’s important to reach out to the ATO early.

Eligibility

To be eligible to set up an ATO payment plan:

• Your debt must be between $1 and $200,000
• You must not already have an active payment plan
• Your tax account can’t be on hold (eg being insolvent or you’ve lodged a dispute)

To set up a payment plan, you need to use online services and have your ATO account linked to your myGOV. To start the payment plan you need to make an up-front payment followed by instalments. Payments may be made weekly, fortnightly, monthly or paid as a lump sum.

Your Tax Agent can also assist with setting up payment plans and communicating with the ATO
on your behalf.

Remember: Payment plans accrue interest therefore you should try and finalise your payment plan in the shortest fixed timeframe possible

If you have any credits or refunds owing to you but you also have a debt with the ATO, then these may be used to pay off or reduce what you owe.

Payment Plan Estimator Tool

The ATO has a handy Payment Plan Estimator Tool here: https://www.ato.gov.au/calculators-
and-tools/payments-payment-plan-estimator

About us:

Festival Bookkeeping are a team of Xero advisers and bookkeepers located in Adelaide, South Australia. We help busy business owners and their teams Australia-wide. You can contact us on 0421 501 887 or sarina@festivalbookkeeping.com.au

Learn more about our bookkeeping services here: https://festivalbookkeeping.com.au/services/xero-bookkeeping-packages/

Looking for more helpful articles about bookkeeping and accounting? Try https://festivalbookkeeping.com.au/xero-payroll-4-common-mistakes and https://festivalbookkeeping.com.au/8-different-ways-to-bundle-your-services/

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