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  • Managing your tax debt

    Everyone pays tax according to what they earn, so the government can provide the services we need. While most people do the right thing, some find it difficult to stay on track with their tax obligations.

    The simplest way for you to manage your tax is to pay in full and on time. However, if you owe tax or are finding it hard to pay on time, it’s important to contact us early on. We will work with you to solve the problem.

    Get it done

    How to pay your debt in full.

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    If you can’t pay your tax debt on time

    If you can’t pay your tax by the due date, we may agree to you entering into a payment plan depending on your circumstances.

    Many people overestimate the size of the problem. We understand that debt is often a temporary problem, caused by unforeseen personal circumstances or a short-term business downturn. If you address problems early, you can prevent your debt from becoming more difficult to manage.

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    You still need to lodge on time

    You need to lodge your activity statements and tax returns on time, even if you’re unable to pay by the due date.

    You’ll avoid a failure to lodge on time (FTL) penalty and show us that you’re aware of your obligations and doing your best to meet them. We will also use any credits or refunds due to you to help pay off your debt.

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    Attention

    If you don't pay your tax on time, you’ll be charged interest from the due date until the amount is paid in full.

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    How we can help you

    If you’re an individual and you have an income tax debt of less than $50,000, you can use our online services for individuals to easily set up a payment plan.

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    Online services for individuals

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    This short video (1 min 34 sec) tells you how we can help if you're having difficulty paying a tax debt.

    Watch

     

    Duration 1:34. A transcript of Stay in control of your business is also available.

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    These are some simple tips to help you avoid getting into debt in the future.

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    How to avoid a tax debt

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    Small businesses experiencing short-term financial difficulties may be eligible for interest-free payment plans for activity statement debts for up to 12 months.

    If you’re a sole trader or operate a small business and are experiencing short-term financial difficulty we may be able to help. We offer help to viable businesses with an annual turnover of less than $2 million that are having trouble meeting their tax payment obligations due to challenging business conditions or unexpected events such as natural disasters.

    If you’re experiencing serious hardship, you can apply for release from payment of some or all of your tax liabilities.

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    Serious hardship

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    If you’ve been affected by a natural disaster such as flood, bushfire or drought, we can help you. We may allow you more time to lodge tax returns and activity statements, and to pay your tax debts without incurring interest charges.

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    People affected by natural disasters

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    Our commitment to you

    When you speak to us about payment of your outstanding tax debt or waiving interest charges, we are committed to:

    • understanding your situation and individual circumstances
    • being fair and equitable in the application of the law, processes and policy
    • considering your case on its merits and assisting you to move on
    • assisting you where possible, if you are trying to engage with us and do the right thing.

    We are committed to supporting taxpayers who want to do the right thing and creating a level playing field for all individuals and businesses. If you make a payment plan with us but don’t keep to it, or ignore your payment obligations, we may refer your debt to an external collection agency or take stronger measures such as garnishee action to collect the debt. In some cases, we may need to take legal action to make sure that the correct tax is paid.

    More information

    • You can write to us at:

    Australian Taxation Office
    PO Box 327
    ALBURY  NSW  2640

    • Taxpayers' charter - what you need to know – for general information about your rights.
    • If you do not speak English well and need help from us, phone the Translating and Interpreting Service on 13 14 50.
    • If you are deaf, or have a hearing or speech impairment, phone us through the National Relay Service (NRS) on the numbers listed below  
      • TTY users, phone 13 36 77 and ask for the ATO number you need
      • Speak and Listen (speech-to-speech relay) users, phone 1300 555 727 and ask for the ATO number you need
      • internet relay users, connect to the NRS on relayservice.com.auExternal Link and ask for the ATO number you need.
       
  • Last modified: 08 Jan 2015QC 22486