Working with the right specialists, you can set up a repayment plan with the Australian Taxation Office. You can place a likely stay on the collection actions, as well as any additional unnecessary costs. Setting up payment arrangements with the ATO can assist in dealing with tax debt payment plan. Which can be stressful, particularly when these unpaid amounts accrue gradually each month and quarter. Payment arrangements with the ATO will enable you to pay off tax debts in instalments over up to two years. This means you can plan your payments in a way that is easier for your current finances.
If you have a tax debt of under $100,000 and are either a sole business owner or an individual taxpayer. You can quickly and easily set up an ATO Payment Scheme via ATO’s online services. If you are a sole trader, or your tax debt, or business statements, are under $100,000, you can request your ATO Payment Scheme online. Any individual or business owner who has a tax debt can apply for an ATO payment plan, as long as the debt is not disputed.
The ATO has created payment plans to assist struggling individuals and businesses. So if you are struggling to repay a tax debt, apply for one. The ATO is generous enough to offer affordable solutions for paying tax debt. Therefore, do not fall behind in payments. If you do not make a payment arrangement, the ATO may exercise one of their many collection powers against you.
Most importantly, when you fail to make payments on a plan, your case is transferred to Enforcement. Where the ATO pursues the unpaid debt with no further negotiations. If you do have to negotiate a payment plan with the ATO, you may have to demonstrate that your business is viable and capable of paying your debt. When you negotiate the payment plan, ensure that your business is capable of meeting its future tax liabilities. Alongside being capable of returning any other outstanding payments.
Set your payments up so that you can also fulfil future tax obligations when they come due. Say, you missed your scheduled instalment and/or did not pay another tax liability by your due date. You can still pay up until the default on your payment plan. Even if you are unable to make a payment, you must still file your return on or before your due date.
You must keep on top of compliance obligations. This includes filling out and filing forms on time and making any payments on time. Realize you are still required to file business activity statements and tax returns for the current period. Make your associated liabilities payable on time, as well as paying off tax debts on schedule.
If you are a small business owner who has an outstanding liability on activity statements, you can probably repay them without interest for up to 12 months. Provided that you have a good history of filing tax returns and paying them. Small businesses with an amount of activity statement debt may be able to make payments interest-free over 12 months. If you are a small business that owes $50,000 or less in taxes, you may be able to request a no-interest payment arrangement. A tax debt loan could be used to settle your debt. You can also make a downpayment to ensure you are on a payment plan, and interest could even be deductible.
We realize it may sometimes be hard to make full payments on the due date. However, you may be able to establish a payment plan that pays your debt off in small, manageable payments over some time. Keep in mind, that a payment plan for your tax debt can be a temporary solution. Since payments may be spread out over two years, and therefore are too large to handle in the long run. You must work out an appropriate payment scenario depending on your circumstances. You can use this as a guide for setting up a payment plan for meeting your tax obligations.
It does not replace your regularly required instalment payments. So you need to ensure that you continue paying the regular amount each month. If you eventually receive tax credits or refunds later, they will be used to lower your debt. But, you still have to meet your required instalment payments. A portion of each payment from an annuity is calculated at the beginning of the annuity, and remains the same every year, even though the payment amounts will vary.
Your history of payments and delinquencies affects ATOs decisions on whether or not to let you into a new agreement. Also what the terms of that agreement must be. By keeping your payments current and paying your payments on an agreement on time, you may find that the ATO is more likely to accept a future arrangement. They will do so without placing any stringent conditions on it. A poor record of compliance may also mean that the ATO would agree only to a shorter payment arrangement. Say, six months rather than one year. Getting an appropriate payment plan can mitigate risk to the ATO. As well as potentially prevent large lump sum payments or defaults.
Working with an expert to identify a viable repayment plan, which aligns cash flow, lowers debt, and ultimately allows a business to keep trading and growing, is the step that many businesses must now take. With an experienced tax debt professional, you can outline a strategy for meeting cash flow needs, while also, if possible, reducing debt. If you are also managing other debt, one strategy is to focus on a single debt with the highest interest rates or penalties at a time, while meeting the minimum payments on your ATO tax payment plan. By telling the ATO of your situation, you may be able to avoid deteriorating debts and possible prosecution.