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Last updated 4 September 2023

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How To Set Up a Payment Plan With the ATO

ato business payment plan phone number

Today, we'll dive into a crucial topic that many entrepreneurs encounter: dealing with tax debt owed to the Australian Taxation Office (ATO). Small business tax debt can happen for various reasons, but addressing it proactively and efficiently is vital. In this blog, we'll walk you through the steps to set up a payment plan with the ATO, ensuring you regain control of your financial situation while safeguarding your business's future.

ato business payment plan phone number

Why Do I Owe the ATO Money?

Before we delve into the nitty-gritty of setting up a payment plan with the ATO, it's crucial to understand why you might find yourself owing money to the tax authorities. Small business tax debt can accumulate for a variety of reasons:

  • Fluctuating Cash Flow:  Small businesses often experience unpredictable income fluctuations. In some months, revenue may fall short of tax obligations, leading to debt accumulation. 
  • Unexpected Expenses:  Unforeseen business expenses, such as equipment repairs or emergency purchases, can strain your finances, making it challenging to meet tax deadlines. 
  • Tax Oversights:  Tax regulations can be intricate, and overlooking deductions or failing to claim eligible tax credits can result in underpayment. 
  • Economic Downturns:  Economic downturns or market shifts can impact business profitability, making it harder to meet tax obligations.

Regardless of the reason, the key is promptly recognising the issue and taking action. Ignoring tax debt can lead to mounting penalties and interest, so it's essential to address it proactively.

What Happens When You Owe the ATO Money?

Understanding the consequences of owing money to the ATO is crucial for small business owners. Ignoring or neglecting your tax debt can lead to a series of unwelcome outcomes:

  • Accumulating Interest and Penalties:  The ATO imposes interest charges and penalties when you fail to pay your tax debt on time. These can significantly increase the total amount you owe. 
  • Legal Action:  In extreme cases, the ATO can take legal action to recover the debt. This may involve garnishing wages, freezing assets, or pursuing court orders to collect the funds owed. 
  • Business Restrictions:  Outstanding tax debt can restrict your business activities. The ATO may withhold tax refunds, suspend Australian Business Numbers (ABNs), or even initiate bankruptcy proceedings in severe cases. 
  • Negative Impact on Credit Rating:  ATO debt can negatively impact your personal and business credit rating, making it challenging to secure loans or credit in the future.  

Given these potential consequences, it's clear that addressing your ATO tax debt is of utmost importance. Setting up a payment plan with the ATO is a proactive step to prevent these adverse outcomes and regain control of your financial stability. The following section will explore how to initiate this process effectively. 

Can I Set Up a Payment Plan with the ATO? 

The good news is that you can set up a payment plan with the ATO to manage your small business tax debt. A payment plan, also known as a repayment arrangement, allows you to pay off your tax debt in manageable instalments over a specified period. 

Here's how you can go about it: 

  • Contact the ATO:  Reach out to the ATO as soon as you realise you have a tax debt. The sooner you address the issue, the better. You can contact them by phone or through their online services. 
  • Provide Necessary Information:  Be prepared to provide details about your financial situation, including your income, expenses, and assets. The ATO will use this information to assess your ability to make regular payments. 
  • Negotiate Terms:  The ATO will work with you to determine a suitable payment plan. This plan will include the amount you need to pay, the frequency of payments, and the arrangement duration. 
  • Stick to the Plan:  Once the payment plan is in place, adhering to the agreed-upon terms is crucial. Missing payments or defaulting on the plan can lead to additional penalties and consequences. 
  • Review and Adjust if Necessary:  If your financial circumstances change during the payment plan, contact the ATO promptly to discuss adjustments. They can modify the plan to suit your current situation better. 

Setting up a payment plan with the ATO can be a practical solution for managing your tax debt while maintaining the financial health of your small business. 

Can You Pay Instalments to ATO? 

Indeed, you can pay your tax debt to the ATO in instalments. This approach offers flexibility and eases the burden of a lump-sum payment. 

As mentioned earlier, the first step is to contact the ATO and negotiate a payment plan. The ATO provides various payment methods to accommodate your preferences. You can make payments electronically through their online portal, via direct debit, or by sending a check or money order. 

Many businesses opt for direct debit arrangements, where payments are automatically deducted from your nominated bank account on the agreed-upon dates. This minimises the risk of missed payments. If your financial situation improves, you can consider making additional payments or paying off the debt earlier than planned. This can help you save on interest and penalties. 

It's crucial to maintain open communication with the ATO throughout the payment plan. If you encounter challenges or need to adjust the plan due to unforeseen circumstances, don't hesitate to contact them and discuss your options. 

How Thriday Can Help You Avoid Having an ATO Tax Bill 

Navigating the complexities of taxation and financial management for your small business can be daunting. That's where Thriday comes into play. We understand that staying on top of your tax obligations is crucial for the success and longevity of your business. Let's explore how Thriday, powered by cutting-edge technology and artificial intelligence, can be your trusted partner in this journey: 

  • AI-Driven Solutions:  Leveraging artificial intelligence, Thriday provides data-driven solutions that streamline your accounting processes. Our AI algorithms can analyse your financial data, identify potential tax deductions, and help you make smarter financial choices. 
  • Real-Time Financial Insights:  Stay updated on your business's financial health with real-time reporting and insights. Thriday's tools provide a comprehensive view of your income, expenses, and tax obligations. 
  • Timely Tax Filings:  Meeting tax deadlines is crucial to avoiding penalties and interest charges. Thriday's automated reminders and tax filing assistance ensure you never miss a deadline again. 
  • Education and Support:  Thriday offers resources and educational materials to empower you with the knowledge to manage your finances effectively. We're here to answer your questions and provide ongoing support. 

By partnering with Thriday, you can proactively manage your tax matters, reduce the risk of accumulating ATO tax debt, and ensure the long-term financial health of your small business. 

ato business payment plan phone number

What Payment Options Do the ATO Accept? 

You'll be pleased that the ATO offers various payment options to accommodate your needs. Here's an overview of the payment methods accepted by the ATO: 

  • Online Payments:  The ATO provides a secure online portal where you can make payments electronically. This method is convenient and allows you to schedule payments in advance. 
  • Direct Debit:  Many businesses opt for direct debit arrangements, where the ATO deducts the agreed-upon instalment amount directly from your nominated bank account on specified dates. This ensures timely payments without manual intervention. 
  • Credit or Debit Card:  You can use your credit or debit card to make payments through the ATO's online portal. Keep in mind that credit card payments may involve processing fees. 
  • BPAY:  BPAY is a popular payment method in Australia, and the ATO accepts BPAY payments. Use the BPAY details provided by the ATO to initiate payments through your bank's online banking platform. 
  • Australia Post:  If you prefer in-person payments, visit an Australia Post office and make cash, check, or EFTPOS payments. Be sure to bring your payment reference number.
  • Cheque or Money Order:  You can mail a cheque or money order to the ATO. Remember to include your payment reference number and allow ample time for processing. 
  • Payment Plans via MyGov:  If you have a MyGov account linked to the ATO, you can set up and manage your payment plan directly through the MyGov portal. 

Do ATO Payment Plans Affect Your Credit Rating? 

One of the concerns that often looms over small business owners when setting up an ATO payment plan is how it might impact their credit rating. Let's clear the air on this matter...

Setting up a payment plan with the ATO does not directly affect your credit rating. The ATO doesn't report payment plans to credit reporting agencies, so your credit score won't take a hit solely because of the arrangement. 

However, it's crucial to understand that your credit rating can indirectly be affected if you fail to meet the terms of your payment plan. To maintain good standing, make payments according to the agreed-upon schedule. Missing payments or defaulting on the plan can lead to the ATO taking further action, which may impact your creditworthiness. 

If you consistently fail to meet your payment plan obligations, the ATO may escalate the situation by initiating debt collection efforts or legal action. These actions can potentially harm your credit rating. 

How Do I Close My Business with ATO? 

Closing your business is a significant decision, and handling your tax matters properly with the ATO before proceeding is essential. Here are the steps to ensure a smooth closure: 

  • Notify the ATO:  Inform the ATO of your intention to close your business. You can do this by submitting the appropriate forms, such as the "Notification of Intent to Cancel Registration" form for Goods and Services Tax (GST). 
  • Settle Outstanding Tax Debts:  Ensure all tax obligations are settled before closing your business. This includes income tax, GST, and any other outstanding payments. 
  • Finalise Business Activity Statements (BAS):  Lodge any outstanding BAS and reconcile your accounts for the final reporting period. This step ensures that your tax obligations are up to date. 
  • Cancel Registrations:  If your business is registered for GST or other tax purposes, cancel these registrations with the ATO. This step will help avoid unnecessary obligations in the future. 
  • Distribute Assets and Settle Debts:  If any remaining assets or liabilities exist, distribute or settle them according to the legal requirements and your business structure. 
  • Lodge Final Tax Returns:  Depending on your business structure, you may need to lodge final tax returns for the business and its owners or partners. Seek professional advice to ensure accuracy. 
  • Cancel Australian Business Number (ABN):  If you have an ABN, cancel it through the Australian Business Register (ABR) to officially close your business. 
  • Keep Records:  Maintain records of all the steps taken during the closure process, as you may need them for tax or legal purposes. 
  • Seek Professional Assistance:  Closing a business can be complex, and it's advisable to consult with an accountant, tax professional, or legal advisor to ensure compliance with all regulatory requirements. 

Remember that closing a business can vary based on your business structure and circumstances. Following the correct procedures and meeting all legal obligations is crucial to avoid future complications or penalties. 

ATO Payment FAQs 

Can i negotiate the terms of my ato payment plan .

Yes, you can negotiate the terms of your payment plan with the ATO to suit your financial circumstances better. It's essential to communicate openly with them about your situation. 

What if I miss a payment on my ATO payment plan? 

If you miss a payment, contact the ATO immediately. They may be willing to work with you to find a solution. Ignoring missed payments can lead to penalties and further consequences. 

Can I pay off my ATO debt early if my financial situation improves? 

Absolutely! Paying off your ATO debt early can help you save on interest and penalties. Contact the ATO to discuss making additional payments or settling the debt ahead of schedule. 

Will setting up an ATO payment plan affect my personal or business credit rating? 

The act of setting up a payment plan itself does not affect your credit rating. However, consistently missing payments or defaulting on the plan can indirectly impact your creditworthiness. 

Can I dispute the amount I owe the ATO? 

If you believe there is an error in the amount you owe, you can dispute it with the ATO. Provide supporting documentation and follow their dispute resolution process.

Can Thriday assist me in managing my ATO tax debt? 

Thriday offers expert guidance and AI-driven solutions to help you manage your tax matters proactively, minimising the risk of accumulating ATO tax debt. 

What should I do if I decide to close my business with the ATO? 

Closing your business with the ATO involves several steps, including settling outstanding tax debts, cancelling registrations, and finalising tax returns. 

Key Takeaways

As we conclude this comprehensive guide on setting up a payment plan with the ATO to manage your small business tax debt, it's essential to reflect on the key takeaways: 

  • Proactive Approach:  Addressing your tax debt and financial obligations to the ATO proactively is essential to avoid escalating penalties and consequences. 
  • Communication Matters:  Open and honest communication with the ATO is crucial. If you encounter challenges with your payment plan or tax matters, feel free to ask for assistance. 
  • Professional Guidance:  Seek the expertise of professionals like Thriday to navigate the complexities of tax management and financial planning. Our AI-driven solutions and expert advice can be invaluable in safeguarding your business's financial health.
  • Responsibility Pays Off:  Responsible financial management, consistent payments, and adherence to tax regulations are the cornerstones of a successful small business. Setting up a payment plan with the ATO is a responsible step toward addressing your tax debt. 
  • Plan for the Future:  Beyond addressing your current tax debt, planning for the future is essential. Effective tax planning and financial management can help you avoid similar challenges in the years ahead. 

Remember that you are not alone in this journey. Thriday assists you with your accounting and tax-related needs, providing the tools and knowledge to make informed financial decisions. 

By following the steps outlined in this guide, you can set up a payment plan with the ATO, take control of your tax debt, and ensure the long-term success of your small business. Financial stability and peace of mind are worth every effort invested in effectively managing your tax matters.

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ATO Payment Plans: What You Need to Know for Small Businesses

Elvie Tagum

  • November 7, 2023

ato business payment plan phone number

One common circumstance where business owners may struggle with their tax obligations is during seasonal fluctuations in income. This often leads to cash flow challenges, making it difficult to meet the ATO’s tax deadlines. Moreover, some business owners mistakenly assume that they can delay tax payments when facing such difficulties. Well, don’t do that to yourself.  

The ATO enforces strict deadlines for tax payments, and any delays can result in unwelcome penalties and interest charges. To proactively manage this challenge, you as a small business owner should investigate innovative methods to efficiently handle their tax obligations. An effective solution involves considering ATO-sanctioned payment arrangements as a strategic approach.  

Oyster Hub understands how difficult it is to cross those lanes alone, and that is why we are here to help you at every step.  In this blog post, we’ll explore what ATO payment plans are, how they work, and why they are essential for small businesses.  

What Is an ATO Payment Plan?  

ato business payment plan phone number

ATO payment plans, also known as a payment arrangement or a tax debt repayment plan, are an agreement between the ATO and a taxpayer to pay their outstanding tax debts over a specified period. These arrangements allows businesses to manage their tax liabilities in a more manageable and structured way.  

Why Are ATO Payment Plans Necessary for Small Businesses?  

  • Cash Flow Management

Small businesses often face fluctuating cash flows, which can make it challenging to pay large lump sums of taxes on time. ATO payment plans provide flexibility by allowing you to spread your tax payments over a more extended period, making it easier to manage your cash flow.  

  • Avoiding Penalties and Interest Charges

Failing to pay your taxes on time can result in penalties and interest charges, which can significantly increase your overall tax debt. By setting up ATO payment plans and making regular payments, you can avoid these additional costs.  

  • Preventing Legal Action

The ATO has the authority to take legal action against businesses that repeatedly fail to meet their tax obligations. ATO payment plans demonstrate your commitment to fulfilling your tax responsibilities, reducing the risk of legal action being taken against your business.  

How Do ATO Payment Plans Work?   

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Setting up  ATO payment plans is a straightforward process:  

A) Contact the ATO: Reach out to the ATO as soon as yourealise that you cannot pay your tax bill in full by the due date. The sooner you contact them, the more options you’ll have.  

B) Provide Information: You’ll need to provide the ATO with details about your financial situation, including your income, expenses, and assets.

C) Negotiate the Plan: The ATO will work with you to create a payment plan tailored to your financial circumstances. This plan will outline the amount you need to pay and the payment schedule.

D) Stick to the Plan: It’s essential to adhere to the agreed-upon payment schedule. Missing payments can result in the cancellation of your payment plan and the imposition of penalties.

E) Regular Review: The ATO may periodically review your payment plan to ensure it remains suitable for your financial situation. If your circumstances change, it’s crucial to inform the ATO promptly.

How We Can Make You Successful ATO Payment Plans?  

ato business payment plan phone number

A) Communication is Key: 

Oyster Hub supports you by serving as a bridge of communication with the ATO. If you ever encounter challenges in meeting your payments, we can liaise on your behalf with the ATO to explore alternatives. Our team ensures that your concerns are addressed promptly and effectively.  

B) Budget Wisely:

Oyster Hub can help you construct a comprehensive budget that includes provisions for your tax payments. We not only help you identify payment due dates but also provide expert guidance in planning for these expenses, ensuring that your financial stress is minimised.  

C) Stay Organised:  

Oyster Hub assists in keeping your financial records well-organised. We help you maintain meticulous records of your tax obligations, payment plan details, and all interactions with the ATO. Our commitment is to ensure that your financial documentation is in impeccable order.  

D) Seek Professional Advice:

Oyster Hub is your trusted source of professional advice. If you’re uncertain about your tax responsibilities or require assistance with your payment plan, our team of experienced tax professionals and accountants can provide tailored guidance to address your specific needs. We’re here to support you every step of the way, making complex tax matters more manageable.  

If you find yourself in need of assistance or guidance with ATO payment plans or any other aspect of managing your small business finances, Oyster Hub is here to help.  

Our team of experts specialises in providing tailored financial solutions to small businesses, and we have extensive experience in navigating the intricacies of the Australian tax system.  Are you s tarting a business in Australia? Here is all You Need to Know .

Conclusion  

Whether you need advice on tax planning, financial management, or setting up an ATO payment plan, Oyster Hub can provide the expertise and support you need to thrive as a small business owner.  ATO payment plans offer small businesses in Australia a lifeline when it comes to managing their tax obligations.   

By working with the ATO to create a structured repayment plan, you can ease the financial burden of tax debt and ensure your business remains in compliance with tax laws.  Remember, the key to a successful payment plan is communication, responsible budgeting, and consistent adherence to the agreed-upon terms.  

Don’t hesitate to reach out to us today , and let us help you ensure the financial success of your business.   

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Home » Blog » Business survival » How to negotiate an ATO payment plan (small businesses)

How to negotiate an ATO payment plan (small businesses)

A payment plan negotiated with the ATO can provide a legal and manageable way to respond to an overwhelming tax debt.

Negotiations of payment plan with ATO during COVID and post-covid

In article:

ATO payment plan – what to do first?

How does it work, if you default on a payment plan…, what the ato can offer you, special circumstances/exceptions, key takeaways.

  • An ATO payment plan is a tailored option for the repayment of an individual or business tax debt
  • It allows the debtor to pay off their tax debt and interest in a time frame and with a regularity that suits their financial situation
  • A payment plan is often appropriate in situations where the debtor has an unmanageable lump-sum tax debt that they do not have the resources to pay off immediately
  • Payment plans are made and altered by communicating with the ATO and obtaining their agreement

Dealing with significant tax debt can be overwhelming, especially when you do not have the liquidity to pay it off when it is due. Individuals and businesses can follow these steps to find a mutually beneficial payment plan that is acceptable to the debtor and the ATO.

  • Collect and read all ATO correspondence

Locate and collate all correspondence from the ATO in relation to your tax debt. Arrange it in chronological order to get a better idea of what is owed, and when it is (or was) due, so you have all the information you need to begin discussions with the ATO.

  • Figure out how much is owed

Refer to the correspondence collected above, and check your running balance online to find out how much is owed. For businesses, log in to the Online Services Portal, and for individuals, log in to myGov. The amount mentioned in the latest correspondence should match the amount listed online; if there is a discrepancy, make sure to clarify this when you contact the ATO.

  • Use the ATO’s payment plan estimator

The ATO has a payment plan estimator tool you can use to workshop a payment plan that will work for you. Input the amount you owe in tax debt (which you should now be aware of after completing the previous step) and choose a frequency that suits you. Make sure to complete this step before contacting the ATO so you are in a more knowledgeable position to negotiate and discuss your actual payment plan.

  • Contact the ATO

You are now ready to speak with an agent of the ATO and begin negotiating a payment plan.

  • If your issue is simple, or you are comfortable sorting out your payment plan without speaking to a representative, you can organise this via online and automated phone payment services which can help you set up a plan to pay in instalments. However, to organise the plan online, you will need a myGov account linked to the ATO, and the debt must be under $100,000. You will also need your ABN (business) or TFN (individual).
  • If your matter is complex or you are concerned about anything to do with your tax debt or potential payment plan, you can contact the ATO during business hours on 13 11 42, or if there is an ATO officer named on your correspondence, you can call them directly.

Keep in mind the following regarding your payment plan:

  • You can pay weekly, fortnightly, monthly, or in lump sum payments
  • Credits and refunds from the ATO will reduce the debt but not replace instalments
  • General interest will accrue until the debt is paid (and the ATO has already agreed to remit)
  • You can make additional voluntary payments or pay the debt off at any time without penalty
  • Make sure you still lodge your activity statements and tax returns on time, even if you can’t pay by the due date to avoid a penalty for failing to lodge on time and show the ATO that you’re aware of your obligations and are doing your best to meet them (this is a condition)
  • Remember that by consenting to a payment plan, you are agreeing to pay the whole debt (without discount)
  • When you pay your final instalment of the payment plan, check your account balance (via the business portal or myGov) to confirm that the payment plan has been successfully discharged

Defaulting on a payment plan can lead to penalties. If you are entering into a plan to give you breathing room, the breathing room will be limited.

If for whatever reason you cannot pay an instalment, contact the ATO immediately to see if the payment plan can be varied to account for your change in circumstances.

Penalties for defaulting on a payment plan may include:

  • Garnishee notices
  • Director penalty notice
  • Direction to pay Super Guarantee Charge (SGC)
  • The ATO may be able to offer interest-free payment arrangements for small businesses with an activity statement debt.
  • However, interest will not be waived in some cases, such as in those where there have been previous defaults.
  • Support and help can be sought from the ATO. It is important to communicate with them as much as possible. If you are doing the right thing and can show this, the ATO is supposed to do everything they can to help you where possible. However, keep in mind that the ATO will not be particularly ‘sympathetic’ – they are not particularly warm.
  • You will need to provide details on your financial situation; businesses may need to show that their business is viable in relation to their payment plan. Do not provide more detail than is necessary, and only provide information relevant to the matter at hand. If you embellish or exaggerate you may be committing fraud.
  • The ATO’s preferred securities are a registered mortgage over freehold property and an unconditional bank guarantee from an Australian bank.
  • Please note – these are very high-value securities. It would be crazy for you to put your house up as collateral for a company debt!
  • However, even in such cases, the ATO will most likely only offer deferral, as opposed to remission from tax debt. This can be particularly tough on farmers and other Australians working in volatile industries particularly susceptible to external forces such as market trends and climate change.
  • However, there have been recent accusations levelled against the ATO for their ‘draconian’ uses of their extensive powers: read the Four Corners report from 2018 here .
  • A payment plan can provide a legal and manageable way to respond to an overwhelming tax debt
  • However, they must be taken literally: failing to comply with a payment plan can force stronger action from the ATO. Any breathing space will be short-lived if you don’t adhere to the plan!
  • While the ATO express their commitment to your wellbeing, their track record in dealing with the public should be considered. Communication and transparency are very important in coming to an arrangement that works but do not give up more information than is necessary. If you are concerned by your contact with the ATO, contact a third party professional for advice.

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How to Set Up a Payment Plan With the ATO 

  • August 30, 2023

Setting up payment plan with ATO

In the dynamic world of business, the obligation to meet tax liabilities can occasionally prove to be a significant hurdle, adding to the operational and financial stress already inherent in running a company. 

Cash flow constraints, unexpected expenditures, or periods of lower-than-anticipated revenue can leave business owners facing the daunting prospect of large tax bills that they are ill-equipped to handle in a lump sum.

The Australian Taxation Office (ATO) recognises that such situations are part and parcel of conducting business and has therefore established mechanisms to alleviate these financial pressures. 

The option to establish a payment plan with the ATO can provide invaluable relief, transforming potentially overwhelming lump-sum tax obligations into manageable, regular payments.

However, the process of setting up such a payment plan can seem overwhelming, especially to business owners already navigating an array of other responsibilities. 

So, in this blog post, we’ll walk you through how to set up a payment plan with the ATO.

Understanding the ATO Payment Plan and Your Tax Obligations

ATO payment plans are formal agreements that allow businesses and individuals who are unable to pay their tax debts in full the opportunity to pay off their debt in increments over time, instead of in one lump sum payment. 

It’s an arrangement tailored to fit the debtor’s financial situation, enabling them to meet their tax obligations in a way that is less burdensome to their cash flow. 

You may be interested in reading: How To Reduce Taxable Income For Businesses

Generally, this arrangement includes both the principal tax debt and any interest accrued.

Once a payment plan is established, the business or individual will make regular payments, typically monthly or fortnightly, until the entire debt is paid off. 

The decision to enter into a payment arrangement shouldn’t be one that you take lightly. So, you need to consider both the advantages and disadvantages of this potential solution before you reach out to the Australian Tax Office. 

Advantages of an ATO Payment Plan

There are several benefits to establishing a payment plan with the ATO:

  • It allows you to manage your tax debts more effectively by breaking the total amount owed into smaller, more manageable instalments.
  • Setting up a payment plan will allow you to avoid penalties and interest that you would face if you simply ignored your tax debt. 
  • A payment plan prevents your debt from being escalated to debt recovery action.

Potential Disadvantages

While setting up an ATO payment plan can offer several advantages, there may be some drawbacks that you should consider:

  •  The ATO doesn’t usually allow interest free payment plans. In most cases, you’ll pay general interest charge.
  • If you don’t stick to the agreed payment plan, the ATO may take further action, such as garnishing your wages or taking legal action.
  • Sometimes, setting up a payment plan may not resolve your ongoing financial issues. In such cases, you may need to explore other options like negotiating a compromise or seeking professional advice.

If you evaluate these factors with reference to your specific individual or business circumstances, you can determine if an ATO payment plan is the best option for managing your tax debts and meeting your obligations.

Establishing a Realistic Payment Schedule For Your Tax Debt

Before you go ahead and follow the steps to setting up your payment schedule, you should have an idea of what would be realistic for you. There is no use in setting up an arrangement that is going to put you under further stress. 

Considering Factors Affecting Repayments

When setting up a payment plan with the ATO, you should consider factors that may affect your ability to make repayments. 

Some of these factors include the following: 

  • Your current financial situation
  • Your expected income and expenses
  • The total outstanding debt amount
  • The interest rate set by the ATO

Take the time to analyse your cash flow to determine a realistic repayment amount that suits your financial circumstances.

Payment Plan With The ATO

Setting up a Payment Plan with the ATO

There are generally three ways you can arrange to set up a payment plan with the ATO.

Online Application Process

To set up a payment plan with the ATO online, first log in to your Online Services for Business account. 

Once logged in, follow these steps:

  • Go to the ‘Accounts and Payments menu.
  • Select ‘Payment Plans’.
  • Click ‘Add’.
  • Choose the account for the payment plan and enter the amount.
  • Select the payment method and frequency.
  • Enter the payment date, upfront payment, and instalments, then click ‘Calculate payment plan’.
  • Review the payment plan details and click ‘Next’.
  • Confirm the declaration and click ‘Submit’ to finalise your payment plan.

Phone Application Process

If you prefer setting up a payment plan over the phone, contact the ATO at 13 11 42. A representative will help you discuss your situation, determine a suitable payment plan, and set it up for you.

Before calling, ensure you have your Tax File Number (TFN) or Australian Business Number (ABN) and relevant tax information readily available. 

ATO Payment Plan

Through a Registered Tax Agent

Alternatively, you can set up a payment plan with the ATO through a registered tax agent . They are professionals experienced in handling tax matters and can offer guidance on structuring a payment plan that meets your financial needs. 

Modifying Existing Payment Plan

If you have an existing ATO payment plan and your circumstances change, you have the option to modify it. 

Here are the steps to do so:

  • Contact the ATO to discuss your new circumstances and propose new payment terms.
  • Provide updated financial information, such as changes in income or expenses.
  • Obtain approval from the ATO for a modified payment plan.
  • Maintain regular communication with the ATO throughout the duration of the payment plan to ensure a smooth process.

Remember, it’s better to be proactive and honest with the ATO when discussing your payment plan – they are more likely to be understanding and accommodating if you demonstrate your commitment to repaying your tax liabilities in a timely manner

Key Takeaways

By now, you should have a solid understanding of how to set up a payment plan with the ATO. 

Remember to use the payment plan estimator tool to workshop a suitable payment plan based on your financial situation. You should complete this step before contacting the ATO, so you have a firm grasp on your options.

If you’re still unsure and would prefer to have a registered tax agent assist you with establishing what’s realistic for your circumstances, contact KNS Accountants today. 

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How an ATO payment plan can help your business

When running a small business it's important to keep on top of paying the people your business owes money to, otherwise known as ‘creditors’, whether it be suppliers, employees, or covering fixed overheads like rent or equipment costs or other working capital requirements.

One of the most important (and overlooked) creditors is the Australian Taxation Office. After a long list of pressing creditors, it can be easy to ignore tax debt notifications, but the earlier you deal with them the more options you are likely to have. That's where the ATO’s Payment Plan comes in.

What is an ATO Payment Plan?

A payment plan is a formal arrangement between your business and the Australian Taxation Office that allows your business to pay back its tax debt, preventing a large lump sum payment which may not be possible due to working capital requirements or cashflow issues.

Like other kinds of payment arrangement, a payment plan consists of an agreed repayment period and is likely to include interest on the amount payable.

How do I know if I need a Payment Plan?

If you find cash flow in your business is tight and you're unable to pay your tax obligations in full by the due date, you may need a payment plan. They are a great tool for small businesses to help manage their payment obligations and can be an effective way to obtain finance.

How do I qualify for a Payment Plan?

To qualify for the payment plan, the ATO may require you to demonstrate that your business is able to repay the debt. They may request to see your business’s profit and loss report or other financial statements to determine this. Some of the things they may look for include:

  • Your business’s gross margins
  • Assets and liabilities
  • Any current debt arrangements
  • Availability of funding

It is also important that all of your small business's tax returns are up to date. On top of this, all financials will need to be lodged for the current financial year, even if your tax debt relates to a specific financial year other than the current financial year.

A hand using a calculator, representing the evaluation process for qualifying for a Payment Plan. Criteria includes business's gross margins, cash flow, assets, liabilities, current debt arrangements, funding availability, and ensuring all tax returns and financials are up-to-date.

What interest rate does the ATO charge on a Payment Plan?

The General Interest Charge Rate is the amount you pay in interest on the debt owing and can vary from quarter to quarter. The interest charge rate is currently very close to 7.0%. To learn more about current rates as well as historical ones, have a look at the ATO’s website here .

What is negotiable in an ATO Payment Plan?

Depending on your circumstances – more than you might think! The variables in payment plans are the size of your business, your lodgement and payment history, and the size of the tax debt.

For example, if you operate a small business with less than $2 million annual turnover and have an activity statement debt of less than $50,000, you may be able to negotiate an interest-free payment plan over 12 months, provided the tax debt has not been owing for a period of greater than a year.

In short, interest-free payment plans are available for activity statement debt for eligible tax payers.

Is interest tax deductible?

Any interest you pay is tax deductible, however the interest rate the ATO offers may be higher than what you could get elsewhere, so it’s important to talk to your accountant and consider all your options. The duration of the payback period is also variable.

How long does the ATO give you to pay?

The payment period can vary; however, 12 months is common. The maximum duration of a payment plan is currently 24 months. The amount payable varies depending on how frequent the payback periods are. You can use this calculator provided by the Australian Taxation Office to plug in different payment periods and it will calculate the amount payable. The ATO can also increase your payment plan's terms under certain circumstances.

An image of the ATO Payment Plan Calculator page. The calculator provided by the Australian Taxation Office can plug in different payment periods and it will calculate the amount payable.

How do I set up a Payment Plan?

There are three ways to set up a payment plan with the ATO.

MyGov Account

You can apply for a payment plan online via your MyGov account, provided you are a sole trader, or your tax debt is under the $100,000 threshold. You will need to first link your MyGov account to the Tax Portal if you have not done so already. To learn more about how to do this, click here .

Call the ATO

If you don’t want to go down the MyGov route, you can call the ATO's automated phone service to set up your payment plan, however, make sure you have your Tax File Number (TFN) and Australian Business Number (ABN) handy.

You will have to call the ATO if your tax debt exceeds $100,000. If your debt exceeds $100,000, but not by a meaningful amount, you may be able to pay a one-off upfront payment to become eligible for the payment plan.

Remember, the Australian Tax Office wants you to pay back the debt, and the payment plan is designed to help you, so be as transparent and proactive as you can be.

Use a registered Tax Agent

The third option is to have your accountant register the payment plan on your behalf via the Tax Agent Portal. If you don’t currently have an agent, please connect with us today.

The image displays three methods for arranging an ATO Payment Plan: Online application via MyGov (for debts under $100,000), phone setup with TFN and ABN (for debts exceeding $100,000), and using a Tax Agent through the Tax Agent Portal.

Does a Payment Plan affect my credit rating?

Historically, ATO tax debt did not affect your credit rating, however, since 1st July 2017, the ATO tells Credit Rating Bureaus about businesses that have not “effectively engaged” with it about their tax debts.

What if I already have an existing Payment Plan?

It isn't possible to have multiple payment plans because one of the conditions of payment plans is that you pay all future amounts as they fall due. Another reason is because payment plans are attached to specific accounts, such as Income Tax 551, not on the assessment itself, for example, activity statements and tax income. If you have an existing payment plan you will need to renegotiate a new payment plan.

How important is it that I stay on top of my payments?

It’s important you stay on top of your taxes as not being able to pay them can be considered a sign your business may be headed for insolvency. It can make it harder for your business to obtain a bank loan or credit extension if it has a large tax debt outstanding.

Unlike other creditors, the ATO has direct access to your business’s income tax account and can pay off your tax debt by deducting payments directly from a tax refund owing to your business without your consent. A payment plan allows you to take back control and, within the negotiable limits, to set your own terms regarding payback of the tax debt.

The key is to ensuring you obtain a suitable payment plan that is able to be serviced while also meeting your business's other cash flow needs.

What happens if I default on my Payment Plan?

If you do enter into a payment plan with the ATO it is important that you are not late in making your instalment payments as this will result in an automatic default on your payment plan. Defaulting on your payment plan will be bad for your payment history and can make it more difficult for you to negotiate a similar payment plan in the future.

Not lodging future activity statements and tax returns on time and paying them in full by the due date will also automatically default an existing payment plan. You can view your activity statements using the online services for businesses portal here .

In summary, it is common for small business owners to find themselves struggling to pay tax debt at some point, however if the debt goes undealt with there can be serious ramifications for you and your business. The ATO can take legal action by referring the debt to an external collection agency or issuing garnishee or director penalty notices (DPN).

In the worst-case scenario, the ATO may issue a bankruptcy notice and commence with winding up your business. What’s important is that you take control of your business’s tax debt and the ATO Payment Plan is one great way to do this.

Can I be released from my tax debt?

You may be able to be released from tax debt under some circumstances, however, you would need to show that paying the debt would cause you serious hardship.

The requirements to meet the ATO policies for serious hardship would be: you wouldn't be able to provide food and accommodation for your family. In this circumstance, selling your home would not necessarily constitute an inability to provide accommodation.

Payment plans are a great tool for managing your business's tax obligations. It is important that you are aware of everything that is available and that you reach out and seek professional advice if required.

If you need to set up a payment plan but you haven't done so before, a registered tax agent is the perfect professional to help. Not only can a registered tax agent help you set up the payment plan, they can help you manage your ongoing obligations by supplying you with cash flow forecast statements and make sure that you stay on track with your payments and assist with any future payment plans that may be needed. For example, every time you lodge a new Business Activity Statement or Tax Return you will need to negotiate a new payment plan.

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Any advice contained in this document is general advice only and does not take into consideration the reader’s personal circumstances. Any reference to the reader’s actual circumstances is coincidental. To avoid making a decision not appropriate to you, the content should not be relied upon or act as a substitute for receiving financial advice suitable to your circumstances.

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ATO Payment Plans

ato business payment plan phone number

What is a payment plan?

A payment plan is an agreement with the Australian Taxation Office (ATO) to pay your tax liability in instalments over a period of time. Not only is it a practical way to meet your payment obligations, but it allows you to break down your payment into smaller amounts that are made via instalments and spread over a fixed period of time. Within a payment plan, you pay back an agreed sum of money weekly, fortnightly or monthly until the balance is cleared.

Who can enter into a payment plan?

Individuals, sole traders, businesses and tax practitioners on behalf of their clients.

What to do before setting up a payment plan

First of all, if you have one, talk to your tax agent who may even be able to negotiate a suitable instalment program on your behalf. If you dont have a tax agent, read on……… When thinking about setting up a payment plan you need to consider:

  • how much you can pay to meet each scheduled instalment (including interest on any overdue amounts)
  • your future obligations.

We also recommend you use the ATO  online payment plan estimator  to calculate a payment plan you can afford. This tool will also help you work out how quickly you can pay off a tax debt and how much interest you’ll be charged. The longer you take to pay off your debt, the more interest you’ll need to pay.

Once you’ve worked out a suitable payment scenario based on your circumstances, you can use it as a guide to set up a payment plan to meet your tax obligations.

IMPORTANT  –  you cannot use this estimator for super guarantee charge debts.

Setting up a payment plan

In some circumstances you will be able to set up a payment plan online without the ATO’s assistance.

On other occasions – even if the payment plan estimator indicates you have found a suitable arrangement – you may still need to contact the ATO for assistance. They may ask for more detail about your circumstances, including about your:

  • bank balances, creditors and debtors.

If you are in business, they may ask you to provide details of your:

  • business income (over the last 3 months)
  • business expenses (over the last 3 months)
  • the business is seasonal
  • previous activity statements are a reflection of ongoing statements.

The ATO ask for this information so they can work with you to create an appropriate and manageable payment plan.

To set up a payment plan without the ATOs assistance, see the information below for your particular circumstances.

Individuals and sole traders

The easiest way to set up a payment plan if you owe $100,000 or less is to use the ATOs  online services . To use online services, you’ll need an active myGov account linked to the ATO.

If you can’t access online services via myGov, you phone the ATOs automated service for individuals on 13 28 65. If you have trouble using the automated phone service, you’ll be connected to a person to help you.

Make sure you have your Australian business number (ABN) or tax file number (TFN) handy, and the full details of your outstanding amount. You may also be able to make a late payment through this number.

Ultimately the ATOs aim is to help you pay amounts you owe in the shortest time and save you interest. When you set up a payment plan, you’ll be provided with:

  • an upfront amount you need to pay
  • examples of instalment amounts that have been manageable for clients with similar circumstances to yours.

You can vary the upfront and instalment amounts above or below the amounts provided – up to certain values.

If you can’t afford a payment plan offered online, or you owe more than $100,000, phone the ATO on 13 11 42 during our operating hours to discuss your options.

If your business owes $100,000 or less, you can set up a payment plan:

  • via  Online services for business  – select Accounts and payments then payment plans
  • by phoning the ATOs automated service for businesses on 13 72 26
  • through your registered tax agent or BAS agent who can use online services to enter a payment plan on your behalf.

If you have trouble using the automated phone service, you’ll be connected to a person who will help you.

To set up a payment plan, you’ll need your ABN or TFN, and the full details of your outstanding amount.

If you have overdue amounts from activity statements, you may be eligible for an interest-free payment plan if you meet the eligibility criteria

If your business owes over $100,000, phone the ATO on 13 11 42 during our operating hours to discuss your options.

If you’re already in a payment plan

You can ask the ATO to change your existing payment plan to an interest-free payment plan if you satisfy the eligibility criteria.

If your request is approved, the ATO will cancel your previous plan. The interest-free period will start from the date you enter into the new plan.

Phone the ATO on 13 28 66 during their operating hours to change to an interest-free payment plan if eligible.

Managing your payment plan – Setting up direct debit

After a payment plan is set up there are a number of ways you can manage the details around your specific plan: –              setting up a direct debit –              changing from a direct debit to another payment method –              modify an instalment date or amount –              update the instalment amounts of your payment plan     Important information for taxpayers entering a payment plan

  • Any tax credits and refunds you receive will be used to reduce your tax debt but won’t replace the required instalment payment. This is called offsetting. Offsetting is where the ATO use a credit or refund from one account to pay off an outstanding debt on another account.
  • General interest charge (GIC) will accrue until the debt is paid.
  • You can make additional voluntary payments or pay off the debt at any time.
  • You still need to lodge your activity statements and tax returns and pay any associated liabilities on time.

Checking the status of your payment plan

Individuals and sole traders can view the status of their payment plan in  ATO Online Services . From the Tax menu in ATO Online Services, select ‘Payment’ and then select ‘Payment Plans’ from the next menu.

Business clients can check their payment plan status from the ‘Accounts and Payments’ menu in  Online Services for Business . To see more detailed information about each payment plan status, click the help icon.

Arrears status

If you’ve missed a scheduled instalment and/or haven’t paid another tax obligation by the due date, you may still have time to pay before your payment plan defaults.

You may receive a letter from the ATO informing you that your accounts are in ‘arrears’, and you have an opportunity to catch up before your payment plan defaults. The ‘arrears’ letter will outline the minimum amount you will need to pay now to prevent your payment plan from defaulting and other action(s) you need to take.

myGov users will receive the letter through their myGov inbox in the first instance. If you have set up a preference to send correspondence to your tax agent, the arrears letter will be sent to your agent.

For more information about a secured payment phone the ATO on 13 11 42 during their  operating hours or speak to your tax agent.

Source: ATO

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7 Detailed Steps to Successfully Organising ATO Payment Arrangements

by Davie Mach | Nov 29, 2018 | Contractor Handbook , Accounting & Tax , BAS, Tax Returns & Financial Statements , BAS, Tax Returns & Financial Statements , Cashflow & Budgeting , Small Business Handbook , Tax Planning , Tax Planning , Tax Tips | 0 comments

7 Detailed Steps to Successfully Organising ATO Payment Arrangements

Organising ATO payment arrangements can help with dealing with tax debts that can be stressful, especially with those unpaid monthly and quarterly amounts incrementally building very quickly. Many small and medium-sized business owners in Australia have a lot of tax to pay to the tax office and can’t afford it. Fortunately, payment plans with the tax office are available to help you deal with tax liabilities in a way that’s convenient for you.

  • 1 Use a payment plan calculator
  • 2 Setup your ATO payment arrangement through phone or online
  • 3 Prepare to demonstrate the viability of your business, if required
  • 4 You might also like our article on 3 Easy Ways Towards Business Tax Minimisation & Pay Less on BAS.
  • 5 Assess the eligibility of your business for interest-free payment plans
  • 6 Meet your ATO payment arrangement tax payment obligations religiously
  • 7 Don’t forget to lodge your current returns
  • 8 Never default on your instalment payment

Use a payment plan calculator

Payment arrangements with the ATO will allow you to pay your tax debts in instalments for as long as two years, which means that you can schedule your payments in a way that’s easy on your current finances. You can use a payment plan estimator to guide you with the best ATO payment arrangement available to you. Your tax refunds or credits, if possible, can be used to reduce your total tax debt. However, they can’t be used as instalment payments, though.

Setup your ATO payment arrangement through phone or online

If your tax debt is less than $100,000 and you are either a sole trader or individual taxpayer, you can quickly and easily set up your ATO payment arrangement through ATO’s online services.

You can also use their 24/7 automated phone services:

  • 13 72 26 for businesses, and
  • 13 28 65 for individuals

If you need to talk to a customer service agent to discuss your situation, however, you can phone ATO on 13 11 42 during the office’s operating hours. This is also the number to call when your debt is more than $100,000

Prepare to demonstrate the viability of your business, if required

The ATO may need you to show that your business is viable, and they will look into various indicators such as your asset/liability position, gross margin, liquidity, cash flow and availability of funding. The ATO may also require you to provide certain information within an agreed timeframe, including how the debt increased, aged creditors and/or debtors listing, and statement of financial positions for the current and two previous fiscal years.

You might also like our article on 3 Easy Ways Towards Business Tax Minimisation & Pay Less on BAS .

Assess the eligibility of your business for interest-free payment plans.

You’ll continue to incur general interest charges while the debt is not yet paid fully.

However, you can arrange for interest-free payment if you’re a small business with an activity statement debt.

There are eligibility requirements, though, such as having an annual turnover of less than $2 million and having a good history of payment and lodgement compliance.

For this payment scheme, you can phone ATO on 13 28 66 during weekdays from 8 am to 6 pm.

Meet your ATO payment arrangement tax payment obligations religiously

Your payment due dates under your ATO payment arrangement will depend on the timeframe that you have agreed upon with the ATO.

While you have a minimum amount to pay for each instalment period, you can also consider making additional voluntary payments to pay off your debt quicker.

You can pay your tax debt using your Australian savings or cheque accounts through your bank’s branch or internet portals. You can also use your credit or debit cards to pay through Government EasyPay for businesses and myGov account for sole traders and individuals.

You can also pay by phone using the Government EasyPay service on 1300 898 089 . In any case, make sure to prepare your Payment Reference Number when paying.

Don’t forget to lodge your current returns

Realise that you’re still obligated to submit your business activity statements and tax returns for the current period as well as timely pay the associated liabilities while also paying off your tax debts under the plan. Failing to comply with your regular ATO obligations will make you default on the plan.

Never default on your instalment payment

Defaulting on a debt under these payment arrangements will turn all future payments to be instantly due and payable.

It will also give you a bad record with the ATO, which will make future dealings with the office more difficult. Specifically, the ATO will impose stricter requirements when you arrange for a new payment plan, e.g. higher upfront payment.

But most of all, when you default on payment under the plan, your situation will be referred to the enforcement division, and the tax office will pursue your outstanding debt without further negotiations.

The ATO is generous enough to provide convenient solutions to pay off your tax debts; thus, don’t default on your payments.

But if you can’t pay an instalment, you can contact the ATO on 13 11 42 during operating hours to discuss your situation and the possibility of adjusting your payment plan to suit your current condition.

The ATO can also assist you if you’re having trouble in paying under the plan due to natural disasters or “serious hardship” such as being unable to provide food and home for you or your family.

Tax debts will be more challenging to handle for you and your business in the future if you’re still ignoring it now.

So, arrange for the payment plan with the ATO today before it’s too late.

If you need professional advice on your tax debt or about tax matters in general, contact Box Advisory Services right away. We also offer a complete range of business finance and taxation assistance for small to medium-sized businesses in Australia. To find out how Box Advisory Services can help you, you can book in a free consultation with us or call us to discuss your CGT matter further.

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ato business payment plan phone number

Hi @aykenator

If you want to make higher repayments to your payment plan, I'd recommend making extra payments here and there when you can afford to, rather than renegotiating your payment plan. When you renegotiate your plan, it means we have to cancel the old one. It'll look bad on your records, even if the intention is a good one. That's why it's better to make extra payments to it without renegotiating your whole plan.

To do this, I'd recommend setting up a BPAY payment in your online banking, or by doing extra payments through our credit card payment processing system. You can find the details for both of these on myGov when you click on ATO online services. Select Tax > Payments > Payment (not Payment Plans).

In the event you need to renegotiate your payment plan, though, you'd need to contact us by phone to do so.

You can read about payment plans on our website.

**edited 18 November 2021 to provide more information**

We've updated our original answer to give you some further information. :)

ato business payment plan phone number

Hi @TeddyATO , I don't understand why renegotiating the payment plan will "look bad on your records, even if the intention is a good one." What if I want to change bank details? There's no option to do this on the ATO website, so will it look bad on my record if I want to pay you - yes give the ATO money - from a different account?

We posted a response to your question on your other thread . It also included an explanation on what @TeddyATO mentioned previously here. I'll include that explanation below for anyone that views this thread in the future.

"It won't necessarily look "bad", but it can impact negotiating later payment plans. By this I mean that when we approve payment plans sometimes we look at how many plans an individual has completed or not in the past. If we see several cancelled plans this could imply issues with meeting obligations. However, this is also something that can easily be discussed in those situations. We'd be able to have a chat to get a bit more info on why they were cancelled and we should see it was all reasonable. So if you were to cancel it for this reason just keep that in mind."

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Home page - Tax Negotiators

ATO Business Payment Plan

Tax Negotiators provide ATO business payment plan services for your company’s needs.

An Australian Taxation Office (ATO) business payment plan is a way for small to medium-sized enterprises (SMEs) to meet their tax debt obligations. Due to the current economic climate and residual effects of Covid-19, more SMEs than ever are using payment plans to settle tax debt. If your business is experiencing poor cash flow and is struggling to meet its tax responsibilities, contact Tax Negotiators today.

ato business payment plan phone number

What is an ATO Payment Plan?

An ATO payment plan is an agreement between you and the Australian Tax Office to pay a tax liability over time. Payment plans can be entered into by an individual, sole trader, business or registered tax agent (on behalf of their clients).

Payment plans work by breaking down the debt into smaller instalments that are made either weekly, fortnightly or monthly over a set period of time. Unlike a large, lump-sum payment, this improves cash flow and frees up working capital for growth. How long an ATO payment plan can be is determined by the type of debt and the amount owed.

Interest-Free Payment Plans

Small businesses with outstanding activity statement debt of less than $100,000 may be eligible for an interest-free payment plan. Conditionally, the debt owed must be paid by direct debit within 12 months. Alternatively, the General Interest Charge (GIC) rate will be applicable. This is a variable rate, however, and is currently about 7.0%. For more information about past and present interest rates, visit the ATO’s website here .

ato business payment plan phone number

Do I Need an ATO Business Payment Plan?

A payment plan is an effective solution for managing cash flow, recovering from financial hardship and avoiding serious fees and penalties. By taking control of your tax and BAS debt, you prevent running the risk of more serious recovery action being taken against you, including garnishee notices, director penalty notices (DPN) or statutory demands. It’s essential to take control of your debt as these recovery tactics have the potential to make you personally liable for unpaid debt or even wind up the business.

Arranging a payment plan is also a good idea for businesses trying to obtain finance. By taking control of your debt, you become less likely to default automatically on other payment obligations and, in turn, improve your payment history and credit score.

Tax Negotiators are backed by a combined experience of over 50 years. We can negotiate a suitable plan for you, reduce BAS and tax debt and help you regain control of your finances. In addition to this, our team are experts in assisting with tax returns and lodging future activity statements.

Can Tax Debt Be Waived?

In some circumstances, you may be able to be released from your debt; however, you will have to meet the strict ATO policies to demonstrate that paying the debt would cause you serious hardship. Examples of this include if making payments were to prevent you from being able to:

  • provide food
  • afford basic necessities
  • provide accommodation for your family.

ato business payment plan phone number

How to Set Up a Payment Plan with the ATO

ATO payment plans can be set up online, through an automated phone service or with your registered tax agent (that’s us!). To set up a payment plan, it’s essential first to calculate how much you are able to pay. You can use the ATO online payment plan estimator on the Australian Government website to do this.

Businesses with a debt of $100,000 or less can arrange payment plans:

  • online via your myGov account . To make a payment plan online, go to Online Services for Business here and select Accounts and Payments, followed by Payment Plans.
  • through the ATO’s automated phone service for businesses on 13 72 26 . When using the phone service, be sure to have your Tax File Number (TFN) and Australian Business Number (ABN) ready.
  • through your registered tax or BAS agent.

At Tax Negotiators, our friendly team can save you the time and stress of trying to navigate the Australian Taxation Office system. We can negotiate, set up, manage and adjust your plan, including an existing payment plan, on your behalf. It’s important to employ the assistance of expert negotiators to ensure you secure a suitable plan for your business. This helps to ensure you can pay the scheduled instalments by their due date and meet your tax obligations.

ato business payment plan phone number

Seek Professional Advice from Tax Negotiators

Regaining control of outstanding debt is a daunting task but one that businesses cannot afford to ignore. Allowing ATO debt to spiral out of control can risk serious legal action being taken against you. We make the process of arranging an ATO plan stress-free. We can take care of everything to allow you to continue focusing on the demands of your business. In addition, we can re-negotiate an existing payment plan to ensure your small business is always getting the best deal possible and you can continually meet your obligations.

To get started, contact our friendly team at Tax Negotiators today by calling 02 4039 8276 or emailing [email protected] .

ato business payment plan phone number

Australian Debt Solvers

  • Corporate & Business Insolvency

Understanding ATO Business Payment Plans

  • December 9th, 2018

Meeting your tax obligations is an essential part of running a company, but what happens when you can’t pay your tax bill? In between being unable to pay and the ATO initiating tax collection action, there are steps you can take to avoid unwanted outcomes.

One of these is entering into a payment plan for your business.

What is an ATO payment plan?

An ATO payment plan or payment arrangement is an agreement between you and the Australian Tax Office that lets you pay off your tax debt over an agreed period of time through instalments.

The ATO will agree not to pursue tax collection activities as long as you continue to fulfil your obligations under the agreement.

A general interest charge applies to payment plans, but note the interest charge is tax deductible. Additionally, if you’re a small business with $50,000 or less owing in tax, you might be able to apply for an interest-free payment arrangement.

If you end up with tax credits or refunds at a later date, it will be used to reduce your debt but you’ll still need to meet your required instalment payments. Additionally, you can make additional voluntary repayments or pay off the entire outstanding amount any time you choose.

Why your business might need an ATO payment plan

Businesses as well as individuals could have problems paying their tax bill from time to time. It’s for this reason the ATO offers the payment arrangement option . By paying in instalments (usually over no more than 24 months), your business could find it easier to pay off the tax that’s due.

Always lodge on time even if you can’t pay the full amount by the due date, since penalties can apply if you don’t lodge as required. Rather than ignoring tax debt notifications, let the Tax Office know if you’re having trouble paying your tax as it falls due.

Keep in mind in certain cases you might be able to request for a remission of late lodgement penalties and interest charges. For example, a family illness, the death of a loved one, or a marriage breakdown could make you eligible for a remission.

Avoiding payment default

Pay every instalment on time to avoid late payments. Pay in advance of the actual due date so your payment has time to clear into the ATO’s system. If you miss an instalment, the arrangement will automatically default and the ATO could vary the payment plan or end it.

If they end it, you need to pay the full outstanding amount immediately. This could involve issuing a garnishee notice to your bank, serving papers to wind up your company, or making you personally bankrupt . A default goes on your record and future dealings with the ATO will likely be more difficult.

As a business, you could have more than one account with the ATO, so ensure you’re paying your instalments into the right account to avoid default. At the same time, remember you need to continue keeping up with future obligations like lodging returns when they’re due and paying new tax as it falls due. Also note directors are automatically personally liable for company PAYG and superannuation debts if these returns aren’t lodged with the ATO within three months of the lodgements falling due.

Finding a payment arrangement to suit your business

You can use the ATO’s payment plan estimator to work out a payment plan scenario that suits your business. The estimator lets you work out how much general interest charge you’ll pay, what your instalments will be, and how long it will take you to pay it off.

You can then use the estimator’s figures to set up a payment plan, whether it’s by calling the ATO, using the automated phone service, or through the ATO online portal in myGov. The online or automated phone options are usually only for tax debts $100,000 or less. If you need to negotiate the payment plan with the ATO, you might need to show your business is viable and able to pay its debts. The ATO might ask for financial records like profit & loss balance sheet information. In some cases, the ATO could consider a secured payment plan, which could involve registered mortgage over property or an unconditional bank guarantee.

As you work out your payment plan scenario, take future tax obligations into consideration. Set up your payments so you can fulfil these other obligations as they fall due as well. When it comes time to pay, you have a number of way you can make your payments, whether it’s funds transfer, credit or debit card, BPAY, or some other option.

A payment arrangement is a binding agreement and you’ll want to avoid defaulting on the agreed terms. When negotiating the arrangement, make sure your business can fulfil future tax debt as well as other outgoings. By keeping lodgements up to date and paying payment arrangement instalments by the due date, you could find the ATO would be more likely to agree to future arrangements without imposing stricter conditions.

Australian Debt Solvers are invested in their clients’ financial success. To learn more about aligning your business’ ATO payment plan with other costs and expenses, contact us on 1300 789 449 today.

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ACT Bookkeeping Group

Tips to Manage Your ATO Payment Plans for Overdue BAS Statement

Sometimes your business encounters some tough months and you find yourself in a pickle with ATO. Your BAS lodgment is overdue, and it is causing you stress. It isn’t the end of the world for your business. If there’s one thing that ATO wants, it is for your business to succeed. They understand that sometimes, things can be a bit difficult; so you can catchup with ATO payment for your overdue BAS/IAS statement.

What is the ATO Payment Plan?

ATO understands that small businesses are an important employment and solution source for the community, so they offer a payment plan to help keep small businesses running. ATO payment plans enable your small business to get through difficult times by letting you work out a suitable payment scenario and manage your tax debt.

Payment Plan Conditions

Before you set up your payment plan, it is very important to know about ATO’s payment plan conditions.

  • All of your credits and tax refunds will be used to lessen your tax debt, but these won’t replace your required installment plan.
  • A General Interest Charge (GIC) will amass until the debt is paid off.
  • You can pay off your debt anytime.
  • You can make additional voluntary payments.
  • You still need to lodge your BAS statements and tax returns and timely pay any associated liabilities.

If you want to know how much interest you’ll be charged and the length of time to pay your tax debt, you can use ATO’s payment plan estimator . This however does not guarantee super charge debts.

How to Manage Your ATO Payment Plan

Here are six efficient tips for managing your payment plan without defaulting.

  • Be sure you pay your first payment on time. It’s best if you could do this before the scheduled due date. Avoid delayed payments at all costs.
  • To ensure you don’t forget monthly recurring payments, schedule them a few days before the due date.
  • Allow time for your payments to clear by doing it a few days before the due date.
  • Your subsequent BAS lodgments is not included in your payment plan, so you still need to pay it in full. If you can’t do so and would like to add an additional BAS to the current plan, contact ATO as soon as possible.
  • If you can’t pay an installment, contact ATO. You can reach them through their online services or call them during their operating hours. Discuss your circumstances so you can change your installment amount or due date. You can also ask for the help of a registered BAS agent. We can help you get an extension on your payment.
  • Defaulting more than three times will affect your credit rating. This will trigger a process where ATO will request more information on your financial situation, and your ability to pay in the future. When you reach this point, ATO may contact your bank and access funds from your account without your permission.

Follow these tips and you’ll soon be off your debt. One last thing to remember, though. Before making your last payment, check your account balance (the final amount to pay) through the ATO online services for individuals, through myGov for sole traders and through ATO’s business portal for other entities.

Final Thoughts

If your BAS statements are overdue and you’d want a payment plan, it is best to ask help from a professional bookkeeper. An expert can help you analyze your business finances so you can come up with a plan to improve your cash flow and turn your business around.

act bookkeeping can help

ACT Bookkeeping Group is a registered BAS agent. Our expert bookkeepers can give you the right advice. If you need help for your BAS lodgement and ATO payment plan. We also help our clients realize their business’ current financial position and help them develop a plan for profit. We can assist you sort out different bookkeeping intricacies, so you can focus on running and growing your business.

We’re available for consultation 24/7. Contact us today and book a free consultation for your bookkeeping needs.

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Discover How an ATO Payment Plan Can Help You

by Thomas S Phabmixay | Aug 24, 2023 | Accounting and Bookkeeping , Business and Investment Structures , Tax and Compliance | 0 comments

ato business payment plan phone number

Page Contents

What is an ATO Payment Plan?

How do i know if i need a payment plan, eligibility requirements for a payment plan.

  • Gross Margins: Your business’s gross profits compared to costs.
  • Cashflow: The movement of money in and out of your business.
  • Assets and Liabilities: What your business owns and owes.
  • Existing Debt Arrangements: Any ongoing debt agreements you have.
  • Funding Availability: Your access to additional financial resources.

What are the interest rates of a Payment Plan?

Flexibility in ato payment plans: what can be adjusted.

Description of negotiable factors in ATO Payment Plans. Payment plan variables include business size, lodgement/payment history, and tax debt size. Example: Small businesses (<$2M turnover) may get interest-free 12-month plans for <$50,000 debt if not overdue >1 year. Interest-free plans for eligible taxpayers' activity statement debt

Interest Deductibility and Considerations for ATO Payment Plans

Payment timeline from the ato: what to expect, how to set up your payment plan, mygov account, calling the ato, through a registered tax agent.

Instructions for Setting Up a Payment Plan with the Australian Tax Office (ATO). Explains three methods: 1. Online application through MyGov account for sole traders or debts under $100,000. 2. Phone call to ATO for those with TFN and ABN, or debts over $100,000. 3. Use a Tax Agent to register the plan via the Tax Agent Portal.

Does a Payment Plan affect my credit rating?

Already have a payment plan here’s what you need to know, why staying on top of payments matters.

Unlike other creditors, the ATO has direct access to your business’s income tax account. They can use any tax refund you’re owed to settle your debt without asking for your permission. With a payment plan, you can regain control and can, within certain limits, determine how you’ll pay back the tax debt.

Consequences of Defaulting on Your Payment Plan

Additionally, failing to submit upcoming activity statements and tax returns on time, and not paying them by the due date, will also lead to a default on your existing payment plan. This information can be accessed through the online services for businesses portal.

In summary, challenges with settling tax debts can arise for small business owners. However, ignoring the debt can result in serious repercussions for both you and your business. The ATO might take legal actions, such as involving external collection agencies or issuing garnishee or Director Penalty Notices (DPN). In extreme cases, the ATO could even issue a bankruptcy notice and begin winding up your business.

Is Tax Debt Relief Possible?

Next step is to contact tms financials.

Book a free financial health review to see the difference we can make in your financial future.

Book a free accountant consultation with TMS CPA Accountants your specialists in Sydney Australia.

Struggling with Tax Debt?

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ATO FY 2023 Business Plan

COMMENTS

  1. Contact us

    Contact us Contact us ATO contact phone numbers and options for managing your tax and super without phoning us. Last updated 1 January 2024 Print or Download There are many ways to contact us for help with tax and super. If you need additional support to contact us, see accessibility. Call wait times

  2. Payment plans

    A payment plan allows you to break down your payment into smaller amounts that are made via instalments and are spread over the shortest possible fixed period of time to minimise general interest charge (GIC) which will continue to accrue.

  3. Account and payments in Online services for business

    You can make a payment plan online if the debt is under $200,000. At the Accounts and payments menu: select Payment plans. select Add. select account for payment plan and the amount. select payment method and frequency. enter payment date, upfront payment and instalments then select Calculate payment plan.

  4. Payment plans

    Petroleum resource rent tax Mineral resource rent tax. Help with paying has detailed information on how to make and manage payment plans, including when a payment plan may default. If you're new to payment plans, we recommend you read this information. You can only make a payment plan if your client:

  5. Contact us

    QC 66428 Print or Download There are many ways to contact us for help with tax.

  6. Business self service

    Businesses can use our self-service at any time. Phone to lodge statements and much more. 13 72 26 lodge your nil annual GST return GST or PAYG instalment annual elections register for fuel tax credits, if you're registered for GST make a payment arrangement for debts under $100,000 check the progress of your lodgments.

  7. Help with paying

    Last updated 4 September 2023 If you're experiencing financial difficulties, our support options may help you meet your tax and super obligations. Payment plans Find out how to set up a manageable payment plan to pay down your debt. Managing payments How to manage your payments, including prepayments and payment transfers. Compromise of tax debt

  8. Setting up an ATO payment plan

    Print friendly Need to pay your tax bill but struggling to work out how you're going to pay it off in time? We know this can be stressful. If you find yourself in this situation, we're here to help. You may be eligible to set up a payment plan. This means paying instalments spread over the shortest possible period of time.

  9. How To Set Up a Payment Plan With the ATO

    8 minutes to read by Jaala Alex Accounting Tax Small Business Payments Contents Why Do I Owe the ATO Money? What Happens When You Owe the ATO Money? Can I Set Up a Payment Plan with the ATO? Can You Pay Instalments to ATO? How Thriday Can Help You Avoid Having an ATO Tax Bill What Payment Options Do the ATO Accept?

  10. ATO Payment Plans: What You Need to Know for Small Businesses

    ATO Payment Plan. Tax Debt Negotiation. Self Employed Loans. Meet Wizard of Accounting ...

  11. How to negotiate an ATO payment plan (small businesses)

    If your matter is complex or you are concerned about anything to do with your tax debt or potential payment plan, you can contact the ATO during business hours on 13 11 42, or if there is an ATO officer named on your correspondence, you can call them directly. How does it work? Keep in mind the following regarding your payment plan:

  12. How to Set Up a Payment Plan With the ATO

    Category: Tax How to Set Up a Payment Plan With the ATO August 30, 2023 In the dynamic world of business, the obligation to meet tax liabilities can occasionally prove to be a significant hurdle, adding to the operational and financial stress already inherent in running a company.

  13. How an ATO payment plan can help your business

    There are three ways to set up a payment plan with the ATO. MyGov Account. You can apply for a payment plan online via your MyGov account, provided you are a sole trader, or your tax debt is under the $100,000 threshold. You will need to first link your MyGov account to the Tax Portal if you have not done so already.

  14. Online services for business

    Online services for business Login By logging in, you agree to the terms and conditions The Business Portal has retired. Use Online services for business to interact with us online for all your tax and super needs.

  15. ATO Payment Plans

    expenses assets bank balances, creditors and debtors. If you are in business, they may ask you to provide details of your: business income (over the last 3 months) business expenses (over the last 3 months) other cashflow information, such as whether the business is seasonal previous activity statements are a reflection of ongoing statements.

  16. Account and payments in Online services for business

    To pay by BPAY®: your electronic fund transfer (EFT) code is needed to pay an account or you can quote the EFT code as your customer reference number (the EFT code is different for each account) at Account details, all valid accounts are listed with payment reference numbers the Biller code is at the bottom of the screen. To pay by direct debit:

  17. 7 Detailed Steps to Successfully Organising ATO Payment Arrangements

    1 Use a payment plan calculator. 2 Setup your ATO payment arrangement through phone or online. 3 Prepare to demonstrate the viability of your business, if required. 4 You might also like our article on 3 Easy Ways Towards Business Tax Minimisation & Pay Less on BAS. 5 Assess the eligibility of your business for interest-free payment plans.

  18. Change payment plan

    Select Tax > Payments > Payment (not Payment Plans). In the event you need to renegotiate your payment plan, though, you'd need to contact us by phone to do so. You can read about payment plans on our website. **edited 18 November 2021 to provide more information**. aykenator (Initiate) 18 Nov 2021.

  19. ATO Business Payment Plan

    In addition, we can re-negotiate an existing payment plan to ensure your small business is always getting the best deal possible and you can continually meet your obligations. To get started, contact our friendly team at Tax Negotiators today by calling 02 4039 8276 or emailing [email protected].

  20. ATO Business Payment Plans

    Australian Debt Solvers are invested in their clients' financial success. To learn more about aligning your business' ATO payment plan with other costs and expenses, contact us on 1300 789 449 today. Entering into an ATO payment plan for your business is one of the ways to avoid unwanted outcomes when unable to pay your bills. Learn about ...

  21. Tips to Manage Your ATO Payment Plans for Overdue BAS Statement

    Here are six efficient tips for managing your payment plan without defaulting. Be sure you pay your first payment on time. It's best if you could do this before the scheduled due date. Avoid delayed payments at all costs. To ensure you don't forget monthly recurring payments, schedule them a few days before the due date.

  22. Discover the Benefits of ATO Payment Plan

    An ATO payment plan is a structured agreement between your business and the Australian Taxation Office (ATO). A payment plan enables your business to gradually repay its tax debt, which can be especially helpful when a big one-time payment isn't feasible due to working capital needs or cashflow constraints.

  23. ATO FY 2023 Business Plan

    ATO FY 2023 Business Plan. FY23 ATO Business Plan_0.pdf (771.5 KB) Last updated: Tuesday, October 17, 2023. U.S. Department of Transportation ... 800 Independence Avenue, SW Washington, DC 20591 866.835.5322 (866-TELL-FAA) Contact Us. Get Important Info/Data. Accident & Incident Data; Airport Data & Information Portal (ADIP) Charting & Data ...