ATO Debt?

I can always tell when someone rings me with the sole purpose of discussing an ATO debt.  There’s a hint of hesitation in their voice and I can almost hear the unspoken wish that I will tell them ‘there’s been a mistake and there’s no debt, what are you talking about?’  Just so you know, that has actually happened once or twice!  Good times 🙂

I’ve put together a few important “to do’s” when dealing with an ATO debt.

  1. Be informed – understand what is owed.  If you are unsure why you have a debt, when it has to be paid or what the correspondence you’ve received means – make it your business to find out.  You can ring the ATO number which is found on every single letter you are sent or contact your advisor and ask questions.
  2. Don’t ignore the debt. The ATO are pretty good at sending statements and reminder letters that you owe them money.  They also tend to be pretty relaxed while they send this correspondence reminding you of the debt but seemingly all of the sudden, a letter comes from a debt collection agency and that’s when the trouble can start.  I always recommend being upfront with the ATO and ringing to ask if you can have an extension for payment.  They will ask why and want some details and often be happy to give a small extension if needed.
  3. Make a payment.  It doesn’t have to be the full amount – just make any contribution to show that you are aware of the debt and committed to repaying the funds.  Regular payments (weekly or monthly) often stave off the debt collection notice for quite some time.
  4. Lodge everything else on time.  If you have tax returns or activity statements that need lodging while your debt is due, make sure to meet your other obligations, don’t just put your head in the sand and ignore everything.  The ATO look at your whole picture when reviewing your account and if you have a debt and a heap of non lodged and overdue other commitments, the picture is going to be much uglier than if everything else is okay but there’s a debt on one account.

If your ATO debt is less than $25,000 and you haven’t received any nasty letters requesting immediate payment,  you can simply ring the ATO and go through an automated telephone process to arrange a repayment plan.  From my experience, I have found that generally your request will be accepted provided the total debt is repaid in less than 12 months.  There’s a great calculator on the ATO website which if helpful when trying to determine what you will need to pay the ATO if you enter into a repayment plan.  Email me if you’d like the link and I’ll send it to you.

I’ll be posting some more information on ATO debts next week along with a couple of pics from our fun run.  We have raised over $1,250 for breast cancer so far and our pink outfits are all ready to go for Sunday.  I’m pretty worried about the heat, not to mention actually making the 5km without falling on my face – wish us luck!

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