What is a payment arrangement?
A payment arrangement is an agreement that will allow you to pay overdue balances by either paying the balance on a specified date or organising a payment schedule on specific dates. Usually, payment arrangements are used to help you spread your payments over a period of time for financial reasons, such as if you have difficulties paying your overdue balances in full.
Payment arrangements with the ATO
If you have difficulties with paying your tax bills on time, the ATO can sometimes offer interest-free payment arrangements, particularly if you are a small business owner with an activity statement debt. If you are an individual and your income tax or activity statement debt is $100,000 or less, you might be able to set up a payment plan with ease through the ATO’s online services. If your debt is over $100,000 you would need to call the ATO to discuss any payment arrangement options.
Before entering into a payment arrangement with the ATO, you should consider that entering into a payment arrangement with the ATO is a sign of insolvency.
All tax credits and refunds will be used to reduce your tax debt; however, it won’t replace the amount of the instalment payment. General interest charges will accumulate until your debt is paid in total. You can also make extra voluntary payments or pay off the debt at any point.
Where to now?
The team at C&D Restructure and Taxation Advisory are here to help. As part of the Vault Group we can offer the full suite of financial products and advice to help you navigate the business landscape. Schedule a meeting here via Calendly or give us a call on 1300 1 VAULT (1300 182 858)
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