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If you have a debt with the ATO and cannot pay it the sooner you address this with the ATO the better. Once you have a debt sitting in your Income Tax or Activity Statement Accounts the ATO if you don’t pay it by the due date the ATO will contact you soon after by one of the following methods – SMS, message in your MyGov Account, letters and phone calls.

General Interest Charge

They will start applying General Interest Charges (GIC) to what you owe and your debt will grow each day. and can be as much as 11.38%. To avoid this you must pay on time.

If you repeatedly default on agreed payment plans or ignore you debt they take firmer action in the form of a Garnishee notice which may go to your bank or employer to pay your money direct to the ATO. They ATO can also issue a Director Penalty Notice which we have seen happen more often and enables them to start legal proceedings to recover the money.

Enter into a Payment Plan

If you cannot pay on time a payment plan needs to be set up, you can either do this yourself and contact the ATO or we can do it for you.

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. When you set up a payment plan, you pay an agreed sum of money weekly, fortnightly or monthly until the balance is cleared.

Tax debts on a payment plan continue to accrue GIC, which compounds daily. Paying your debt in the shortest period of time will help reduce the GIC that you’ll pay.

You should also be aware:

• you still need to lodge your obligations and pay any associated liabilities on time
• you must factor in payment of your ongoing obligations, in addition to any payment plan
• if you have multiple overdue tax debts, you will need to pay any other tax debt in full or set up payment plans to avoid defaulting or debt recovery action
• any tax credits and refunds you receive will be used to reduce your tax debt offsetting – this will not replace the required instalment payment
• you can make additional voluntary payments or pay off the debt at any time.

Remission of Interest

You can request a remission of your interest. The ATO may remit the interest if you have extenuating circumstances which caused your delay in payment. We can deal with the ATO on your behalf and seek to get the interest remitted.

We highly recommend you save yourself the stress and deal with any monies you owe straight away.

The ATO