ATO Payment Arrangements
written by Darren Hagarty
Circumstances will sometimes get in the way of your ability to pay a personal or business tax debt on time.
If this is the case, it is vital to go on the front foot and put a payment arrangement in place with the ATO. For larger business debts, this is now more important than ever with new legislation allowing the ATO to disclose the business tax debt information of a taxpayer to credit reporting bureaus in certain circumstances.
A payment arrangement is basically an agreement between you and the ATO where you agree to pay off a tax debt over time in instalments. In return, the ATO agrees not to use its debt collection powers against you.
Payment arrangements can take a number of forms:
- Equal instalments at regular intervals;
- An initial up-front payment, followed by equal instalments at regular intervals;
- Equal instalments at regular intervals, which then step up to larger instalments at a nominated future date;
- A single lump sum payment at a nominated future date on the occurrence of a specific event (e.g. a sale of business or sale of property).
A pre-requisite for the ATO entering into a payment arrangement is that the person or entity seeking the arrangement has lodged all outstanding tax obligations, such as BASs and tax returns. Basically, the ATO want to ensure that all tax debts have been reported before they consider an arrangement.
We are regularly involved in the negotiation of payment arrangements for our clients.
If you owe the ATO a debt which you can’t pay in full by the due date, please contact your PT Partners advisor to discuss your options.
Darren Hagarty is a Director of PT Partners.