As we continue the preparation of 2022 financial year tax returns, the Australian Taxation Office (ATO) has reminded business owners that there is help available when paying your tax obligations, and they want to work with the community to resolve tax debts. Payment plans provide a practical solution to paying off tax debts for individuals, sole traders and businesses alike.

What is a payment plan?

A payment plan allows you to break up your tax debt into smaller and more manageable payments over an agreed period of time. This is done through paying weekly, fortnightly or monthly instalments until your balance is cleared. A payment plan provides flexibility as well, as you can make additional voluntary payments or pay off the balance in full at any time.

Any tax credits or refunds received during the period of the payment plan will be used to further reduce the debt owing. It is important to note that all future tax obligations need to be lodged on time and paid in full, otherwise the payment plan will be in default. Interest will also still accrue on your outstanding tax debt; however, some businesses are eligible for interest-free payment plans on overdue activity statement amounts.

Why set up a payment plan?

It is important that you stay up to date with your lodgements and pay what you can, as not engaging with the ATO can lead to harsh penalties and further enforcement actions. A payment plan organised with the ATO shows your commitment to repaying your outstanding debt.

As a registered tax agent, Pilot can help negotiate a payment plan with the ATO on your behalf. We can also provide advice on cash flow and budgeting to assist with determining the amount of the monthly instalment.

Learn more

If you need any assistance in setting up a payment plan, please contact Kristy Baxter or Angela Stavropoulos from our Medical Services Team or your Pilot advisor on (07) 3023 1300.