Don’t ignore the debt

Even if you can’t afford to pay, it’s important to:

• open and read letters, emails or messages from the ATO
• keep your contact details up to date
• lodge any overdue tax returns or BAS statements
• respond to requests for information.

Staying up to date with your tax returns and BAS statements can make it easier to access help from the ATO.

The ATO may add interest to unpaid debts and can take further action if you don’t engage with them.

Work out what you can afford

Before speaking with the ATO, prepare a simple budget.

This will help you understand:

• how much money is coming in
• your regular living expenses
• what other debts you’re paying
• how much you can realistically afford to pay towards the debt.

Any payment plan should leave enough money for your living expenses and future tax bills.

Ask the ATO what help is available

If you’re having trouble paying, contact the ATO as soon as possible.

Depending on your circumstances, the ATO may be able to:

• give you more time to pay
• set up a payment plan
• pause payments for a period
• remove or reduce some penalties
• remove or reduce some interest charges
• provide additional support if you’re experiencing financial hardship

If you can afford to make payments while you’re sorting things out, keep doing so.

Useful ATO resources:

• Help with paying tax debts
• Payment plans
• Payment plan estimator
• Support for people experiencing financial hardship

Explore your options

The ATO usually charges interest on unpaid tax debts.

Sometimes you can ask for some of those interest charges to be reduced or removed.

If paying your tax debt means you can’t afford basic living costs such as food, housing, utilities, medical treatment or education costs, there may be extra support available.

In some situations, the ATO may agree to reduce or release an eligible tax debt.

Find out more:

• Release from tax debt
• Application for release from tax debt
• Interest charges and remission requests

What happens if I don’t pay?

If you don’t deal with a tax debt, the ATO may take action to recover the money.

This can include:

• using tax refunds to reduce the debt
• taking money from your bank account
• taking money from your wages or other income
• taking legal action
• in some cases, applying to make you bankrupt.

The earlier you contact the ATO, the more options you’re likely to have.

Small business owners

If you run a business, make sure any payment plan leaves enough money to pay future tax bills as they fall due.

What if I disagree with the ATO?

If you think the debt is wrong, or the ATO hasn’t properly considered your circumstances, ask them to take another look at the decision.

If the issue isn’t resolved, you may be able to make a complaint, seek a review, or contact the Tax Ombudsman.

Useful links:

• ATO complaints
• ATO objections and reviews
• Tax Ombudsman

Speak to a financial counsellor

If you’re feeling overwhelmed and need some help to get back on track, you can speak with one of our financial counsellors.

Financial counsellors aren’t judgemental about your circumstances – they’re here to offer you free, confidential and independent advice and assistance.

To speak to a financial counsellor, you can:

• Call the National Debt Helpline on 1800 007 007 – open weekdays from 9.30am to 4.30pm
• Use our live chat service by clicking on the chat icon in the bottom right corner of your screen. Live chat is available 9am to 8pm weekdays.
• Make an appointment with a financial counsellor in your local area using the Find a financial counsellor map