Help for small businesses experiencing short-term financial difficulties

Help for small businesses experiencing short-term financial difficulties

We understand that small businesses can experience short-term financial difficulties due to challenging business conditions or unexpected events such as natural disasters. We offer help to viable businesses having trouble meeting their tax payment obligations due to such short-term difficulties.

This help includes:

  • flexible payment arrangements that align with cash flow
  • remission of general interest charge (GIC) where appropriate.

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For more information on payment arrangements, watch the 'Stay in control of your business' video on our YouTube channel at www.youtube.com/AusTaxOffice

GIC-free payment arrangements for activity statement debts

In some cases we offer payment arrangements for activity statement debts free of GIC for up to 12 months. These arrangements are aimed at helping small businesses that have a good history of meeting their tax lodgment and payment obligations but are experiencing short-term financial difficulties.

Who is eligible?

You may be eligible for a GIC-free payment arrangement if your business:

  • has an annual turnover of less than $2 million
  • has a recent activity statement debt of $50,000 or less, which has been outstanding for no longer than 12 months
  • has a good payment and lodgment compliance history, including
    • no more than one payment arrangement default within the last 12 months
    • no outstanding activity statement lodgments
  • is unable to obtain short-term finance through normal business channels
  • is able to demonstrate ongoing viability, and
  • agrees to a sustainable direct debit payment arrangement that will allow the debt to be paid within 12 months.

How does it work?

  • You will not have to pay GIC on your activity statement debt for a maximum of 12 months from the day on which you enter into the arrangement with us.
  • The actual GIC-free period
    • starts on the day you make the agreement with us
    • finishes on the day your final instalment is due.
  • If you default on the arrangement the GIC-free period will end on the date of default.
  • You must meet all of your ongoing tax payment and lodgment obligations.

How do you apply?

To apply, phone us on 13 11 42 between 8.00am and 6.00pm, Monday to Friday.

If you are a registered user, you can contact us via the Business Portal.

Tax agents can contact us using the Tax Agent Portal.

BAS agents can contact us using the BAS Agent Portal.

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Use our online calculator to calculate different payment scenarios based on your circumstances. You can then use these as a guide to propose a payment arrangement that enables you to meet your tax obligations.

Frequently asked questions

GIC-free payment arrangements

When does the GIC-free period start?

It starts on the day you enter into the GIC-free payment arrangement. This will usually be earlier than the date on which your first payment instalment is due.

Can I get a GIC-free payment arrangement if my activity statement debt is with an external collection agency?

You can still enter into a GIC-free payment arrangement under these circumstances. You will need to negotiate this with the external collection agency.

What is a direct debit payment arrangement?

A direct debit payment arrangement is where we automatically deduct instalments from the payer's bank account. The direct debit process is established at the start of the arrangement.

Why does the ATO expect me to enter into a direct debit payment arrangement?

A direct debit payment arrangement is a simple way to help businesses pay their instalments on time, every time. They help you commit to meeting the instalments and reduce your risk of defaulting on the payment arrangement by forgetting to pay.

I am already in a payment arrangement. Am I still eligible for a GIC-free arrangement?

You are still eligible if you satisfy the eligibility criteria.

You can renegotiate your payment arrangement at any time. Normally, a payment arrangement would be renegotiated where your circumstances have changed.

GIC-free payment arrangements can not be backdated. The GIC-free period starts from the date you enter into the new arrangement.

What if I default on my GIC-free payment arrangement?

If you default on your GIC-free payment arrangement, the GIC-free period will end immediately.

We may take firmer action to collect the debt. This may involve issuing garnishee notices, taking legal action to recover the debt and initiating proceedings leading to insolvency.

If you are having difficulty meeting the terms of your GIC-free payment arrangement, you should contact us as soon as possible on 13 11 42. We will work with you to help you meet your taxation obligations.

Why does my payment arrangement letter state that GIC will apply when I have entered into a GIC-free arrangement?

Provided you meet the terms of your arrangement, the GIC will be remitted for the period you maintain your arrangement, up to a maximum of 12 months.

Will I receive a running balance account statement after entering into a GIC-free payment arrangement?

We will not automatically send you an account statement. However, if you require a statement, phone us on 13 11 42 between 8.00am and 6.00pm, Monday to Friday.

If I already had a payment arrangement in place and then negotiated a GIC-free arrangement, will the previous arrangement appear as 'defaulted' on my record?

The previous arrangement will not appear as 'defaulted'. Before entering you into a GIC-free payment arrangement, we will cancel your previous arrangement.

How does the annual turnover used to determine eligibility for a GIC-free payment arrangement relate to GST turnover?

The annual turnover question is the general turnover of the business. It is not GST-specific.

Last Modified: Monday, 13 May 2013

Our commitment to you

We are committed to providing you with accurate, consistent and clear information to help you understand your rights and entitlements and meet your obligations.

If you follow our information and it turns out to be incorrect, or it is misleading and you make a mistake as a result, we will take that into account when determining what action, if any, we should take.

Some of the information on this website applies to a specific financial year. This is clearly marked. Make sure you have the information for the right year before making decisions based on that information.

If you feel that our information does not fully cover your circumstances, or you are unsure how it applies to you, contact us or seek professional advice.

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