ATO Debt, interest rates and payment plans

What goes up, must come down!

Every action causes an equal and opposite reaction.

Every debit has an equal and corresponding credit.

The government has flipped the switch on ATO debt.

During Covid we all benefited from the government stimulus measures designed to keep our economy going and people in jobs.

The ATO put a hold on interest to debts over a 3-year period.

A report by the university of Melbourne quantified the total federal government stimulus package for Covid at $507 billion.

Our economy fared better than most during and post Covid. The stimulus worked.

We have seen the same pattern of stimulus followed by austerity after the GFC. This is not new. The cycle will undoubtedly repeat again during our lifetime.  

So now that the Government has switched back to “collections” and with interest rates higher than they have been in years taxpayers are feeling the pinch.

We are aware that clients are struggling with the cost of living and keeping on top of their ATO obligations.

We are always happy to help with payment plans, when required.

Things to be aware of when requesting a payment plan

1.       Payment plans can only be requested for debts that are showing on ATO accounts. (Lodged amounts)

2.       The ATO will require a minimum 20% deposit on debts you are requesting a payment plan for. Please do not pay the deposit before you have requested a payment plan. The ATO will require you to pay again.

3.       Be specific about the repayments you can make. Can you pay weekly, fortnightly, monthly? Will you pay on a specific date each month, the 10th or the 25th?

4.       The total debt you are requesting a payment plan for must be repaid within 2 years.

5.       You will be charged interest by the ATO. The ATO interest rate is currently 11.34%.

6.       All future lodgements must be in on time and paid in full. Lots of taxpayers fall foul of this one. A payment plan with the ATO is only for the debt that exists when you enter the payment plan, it’s not a line of credit.

If you require help with a payment plan please download our checklist, sign and return so we can action it for you.

Please be aware that we are requesting this from the ATO. There is no guarantee that we will be successful.

Payment Plan checklist.pdf

Download PDF • 108KB