I Cant Pay My Tax Debt

I can’t pay my tax debt – a big problem with real solutions

Receiving a tax debt from the Australian Taxation Office, either as an individual or a business, can be an anxiety-provoking experience. There are many reasons a person or business can find themselves with a tax debt, and it’s often not the fault of the individual or business directors. However, the important thing is to take steps to resolve it quickly.

I can’t pay my tax debt – what happens next?

If the debt is not paid in time, or a suitable payment arrangement is not made, the ATO can add interest to the amount owing, refer the matter to a debt collection agency, initiate bankruptcy or dissolve a company, or use future tax return money to pay the debt. They can even prevent you from leaving the country until the debt is paid.

However, if you are having trouble paying your tax debt, there are ways to avoid these penalties. The first step is to speak with the ATO and see if a payment plan can be arranged. In most cases, the debt will continue to accrue interest until paid off in full. If your business has incurred the debt and there are difficulties repaying it, the ATO may undertake an assessment of the business to see if it is still viable or should be put into liquidation.