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Managing your business’s tax debts

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The ATO has recently shifted to a more active approach to debt recovery and may require a more proactive method from you with dealing with tax debts.

 

You or your tax agent can review your income tax assessment notices or use the ATO's online services to check your current tax debt. You can also contact the ATO directly by phoning 13 28 66 (the business enquiries line).

If you find yourself unable to settle your tax debt in full by the due date, don't panic. The ATO offers several repayment options, including:

  • For debts under $100,000, you can set up a plan online using self-services. This option is available if you don't already have an active plan for the same debt and can cover the amount within two years.
     
  • For larger debts or more complex situations, you can propose a tailored payment plan. The ATO provides tools like the Payment Plan Estimator and Business Viability Assessment Tool to help you create a realistic proposal. In addition, the ATO may need to assess capacity to pay, including details such as income sources, expense and cash flow information.

Remember, entering into a payment plan means committing to paying future tax obligations on time as well and interest charges apples to unpaid tax debts.

The key to managing your tax debt successfully is proactive communication. If you're experiencing difficulties, don't wait for the ATO to contact you. Reach out to the ATO directly, or to your registered tax agent, as soon as possible. By engaging early and honestly, you can avoid more serious potential consequences like director penalty notices, garnishee notices or having your tax debt disclosed to credit reporting bureaus.

 

 

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