What to do when you have ATO tax debt
Have you found yourself in the following situation?
You have sold your investment property, or shares at a profit, and have spent the cash. You prepared your tax return and found out you have to pay capital gains tax.
You have started your own business in the last 12 months, cash flow is tight with slow paying clients. You have outstanding business activity statement debt.
You have lodged your tax return that resulted in an income tax debt.
Whatever your reason might be, you have ATO tax debt. The amount is falling due, or is overdue.
But you cannot come up with the funds to repay the debt in full.
What should you do?
(No, hiding your head under the sand isn’t an option!)
Whether it is an income tax debt, or a business activity statement debt (bas debt), we are here to help.
How much do you owe?
The first thing is to find out how much you owe in total. This can be easily done by contacting us, or checking your myGov account.
Review your finances
The next step is to review your financial situation.
How much do you have in your bank account that you can use to pay the debt now?
How much can you afford to pay towards the debt regularly (weekly or monthly)?
How long will it take for you to repay the debt given the above situation?
Work out your repayment plan
Once you have found out answers to the above questions, you can use the ATO’s payment plan estimator to work out your instalment plan – the ATO’s estimator is a useful tool to find out the repayment details based on your financial situation, and estimates the amount of interest payable to the ATO in this scenario. This gives you a good idea of what your repayment terms to be.
Final step is to reach out. Either you can contact the ATO directly, or give us a call so we can negotiate a payment plan for you.