Payment Plans: The ATO’s Last Area of Flexibility
Despite its tough stance on collections, the ATO is still open to negotiating payment arrangements. However, its criteria for accepting payment plans have changed significantly in the last 12 months.
At AD Partners, we’ve successfully negotiated numerous ATO payment plans, helping our clients avoid costly and disruptive enforcement actions.
Here’s what you need to know to improve your chances of success:
- Ensure All Lodgements Are Up to Date
📌 The ATO won’t even discuss a payment plan unless all outstanding tax returns and activity statements are lodged.
📌 Make sure you’re fully up to date before requesting a payment arrangement.
- Be Prepared for Shorter Payment Terms
📌 The ATO prefers payment plans of 12 months or less.
📌 In some cases, they may extend to 24 months, but longer terms are rare and require strong justification.
- Expect an Upfront Payment
📌 The ATO typically requests an upfront payment of 20-50% of the outstanding debt.
📌 We have successfully negotiated lower upfront amounts in some cases, but approval depends on financial circumstances.
- Understand That Principal Tax Debt Won’t Be Waived
📌 The ATO cannot legally waive tax debt unless:
✔️ Approved through formal insolvency procedures (e.g., Small Business Restructuring, Voluntary Administration).
✔️ Supported by government intervention.
- Interest and Penalty Remissions Are Rare
📌 Waiving penalties and interest is difficult, but not impossible.
📌 The ATO reviews each request on a case-by-case basis, considering past compliance and willingness to engage.
- Act Early to Improve Your Chances
📌 The earlier you engage, the more flexibility the ATO will offer.
📌 Proactively showing your commitment to meeting obligations increases your chances of securing a favourable arrangement.
📌 Ignoring the debt won’t make it go away—it only increases the risk of enforcement action.
Need Help Negotiating with the ATO?
At AD Partners, we have a proven track record of successfully negotiating payment arrangements with the ATO. Our expert guidance can:
✅ Help you secure a payment plan that works for your cash flow
✅ Minimise the risk of aggressive collection actions
✅ Provide strategies to stay compliant and avoid future tax debt issues
💬 If you’re struggling with ATO debt, don’t wait until it’s too late. Contact us today to discuss your options and let us help you regain control.
