ATO payment plans (Australia)

Explains how payment plans can be setup with the ATO along with information on interest charges.

Sometimes thing get a little tight, and then you get your ATO quarterly BAS, monthly IAS or annual income tax.

According to the ATO, they're here to help ... kind of.
Actually, in our experience, the ATO really is open to a discussion - it never helps to avoid them and let things drag out. Rather, be on the front foot and approach them and you'll find them understanding.

First up, it's really important to make sure your lodgements are up to date, because if they're not the ATO can apply penalties as well as interest charges.

It's only when you actually have all your lodgements up to debt, and the ATO can see your debt that you can then explore entering into a payment plan with them.

First thing you need to be able to answer the ATO is how much can you afford to pay, and when ... and they do like to see some upfront contribution. And in answering that you should be aware of upcoming BAS' and other obligations that you should be able to meet ... on top of your current debt payment plan. 12 month payment plans are fairly common, and longer are possible but you may need to answer more questions.

If your debt is less than $100k you can usually do this either online (via myGov for individuals) or by ringing up to ATO - 13 28 65 for individuals or 13 72 26 for companies.

Beyond $100k in debt the ATO is going to push you harder to ensure that the payment plan is realistic and that your business is viable.

Check out the ATO's payment plan estimator for more details.

A few other things to note:

  • Interest applies to the debt - at the ATO's prevailing general interest charge
  • if you miss any payments, the payment plan stops, immediately
  • Not surprisingly, if you then need to go back to the ATO they'll ask you more searching questions for the breach.