ATO Business Payment Plans for Business Tax Debt

Need help with Australian business tax debt? Wisdom Business Consultants can negotiate an ATO payment plan to suit your needs and get you back on track.

An Australian Taxation Office 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 a payment plan to settle tax debt. If your business is experiencing poor cash flow and is struggling to make payment on its tax responsibilities by the due date, contact Wisdom Business Consultants today.

Repay Debt with 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, however, the ATO’s preferred payment plan terms are eighteen months to a maximum of two years.

Wisdom can help by reaching out to your creditors on your behalf. We know how to negotiate with them to set up a payment plan, giving you time to get on top of things and pay your debts. In addition to this, we will strive to secure lower interest rates and reduced debts, making your repayments even more managable.

Interest-Free Payment Plans

Small businesses with outstanding activity statement debt of less than $50,000 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.

If your debt only slightly exceeds the relevant limit for interest free eligibility, you may be able to pay a single, upfront payment in order to secure an interest free payment plan. This type of payment plan can also then be paid via direct debit within 12 months.

Eligibility Requirements for an Interest Free Payment Plan:

  • annual turnover is less than $2 million
  • has recent activity statement debt of $50,000 or less that have been overdue for up to 12 months
  • has a good history of payment and lodgements, including:
    • no more than one payment plan default over the last 12 months
    • no activity statement lodgements outstanding
  • unable obtain finance through normal business channels
  • is able to demonstrate ongoing viability.

If you think you may be eligible for a payment plan without interest, contact Wisdom today. We can assess your situation to ensure you meet the requirements based on that information. This can make a drastic difference to the timeframe in which you are able to pay your tax debt and alleviate your stress.

Take Action to Get Tax Debt Under Control with a Payment Plan

A payment plan is an effective solution for businesses struggling with cash flow and financial hardship as it offers manageable repayments and prevents serious fees and penalties. By taking control of your tax and BAS debt, you avoid 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 your business.

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

Wisdom 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.

The team at Wisdom understand these provisions as well as the complex rules and regulations of the tax system. This thorough knowledge and experience is why Wisdom are the trusted consultants working for all Australians.

Get Expert Help to Set Up a Payment Plan

If your business meets certain benchmarks, the Australian Taxation Office (ATO) now has the power to disclose your debt information and non-payment to credit reporting agencies. In order to attain a suitable payment plan and prevent being reported, it’s essential to actively engage with the tax office regarding your debt. This can mean engaging personally, or through a tax debt expert like Wisdom Business Consultants.

You will be reported if:

  • You are not an excluded entity, and you have an Australian business number (ABN)
  • You have not contacted the ATO regarding your business tax debt
  • You have one or more tax debts overdue by more than 90 days
  • Your business owes the ATO $100,000 or more
  • You have not lodged a dispute with the Inspector-General of Taxation Ombudsman (IGTO) to regarding your debt
  • You do not have an active complaint with the IGTO about the ATO’s intention to report your business tax debt information.

An excluded entity is either a:

  • Deductible gift recipient.
  • registered charity.
  • complying superannuation fund.
  • government entity.

Critically, the ATO may not report your tax debt if you can demonstrate that you are experiencing extenuating circumstances. Therefore, it is crucial to contact Wisdom to ensure your hardship is effectively communicated so that your debt may be negotiated or released.

How To Set Up A Payment Plan:

ATO payment plans can be set up online through your myGov account, 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.

Once you have linked your myGov account to the tax portal, businesses with a tax debt of $100,000 or less can arrange payment plans:

  • via online services using 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.

To be approved for a payment plan, businesses must ensure all activity statements and tax information for the current financial year has been lodged, even if the tax debt relates to a specific financial year in the past.

When you contact Wisdom, our friendly team can save you the time and stress of trying to navigate the Australian Taxation Office system and myGov account. 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 your tax instalments by their due date and meet your tax obligations.

Defaulting A Payment Plan

Once Wisdom have secured your ato payment plan, it is critical that you pay each instalment as it falls due and meet your obligations for future statements and tax returns. Failing to do so will automatically default your existing payment plan. In turn, this creates a poor payment history which can inhibit your ability to secure a payment plan in the future. As can be expected, late payment or failing to pay a scheduled instalment will also automatically default your payment plan.

Wisdom Business Consultants are experts and helping small businesses establish effective payment plans so they can meet their tax obligations including statements and tax returns. We are experienced in negotiating payment plans to suit our client’s situations, ensuring they can pay steadily and allowing them to retain vital working capital.

Seek Professional Advice from Our Business Consultants

Regaining control of outstanding tax and activity statement 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 payment plans stress-free. We can take care of everything regarding your payment plan to allow you to continue focusing on the demands of your business. In addition to this, 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.

Securing a payment plan that allows you to make payments at a manageable pace can make-or-break a business experiencing financial hardship. When your payment instalments have been based on your budget, you can both pay back your tax debt and thrive again. This removes the stress of navigating ATO payments and not only improve the health of your company, but your own mental and physical health, too.

To get started, connect with us today by calling 1300 277 148 or emailing

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