Anyone ever extended their due date for tax bill?

Discussion in 'Accounting & Tax' started by Jmillar, 26th May, 2019.

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  1. Jmillar

    Jmillar Well-Known Member

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    Hi all,

    I have a fairly large tax bill due in a few weeks and due to a couple properties taking longer to sell than expected, I'm a little short. I've seen that I can apply for a payment plan with the ATO online, but I wondered if anyone has ever managed to call the ATO and negotiate for them to extend the due date for a few months?

    Thanks
     
  2. Lemmy a fiver

    Lemmy a fiver Well-Known Member

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    I have never tried for an extension to a due date payable.
    I have applied for a 12 month payment plan once when building & fitout costs for my work premises blew out after I decided to put in an additional mezzanine floor.
    It was either build with a mezzanine or pay my tax bill on time.
    Can't remember the ATO interest rate? (but it wasn't on the cheap side back then).
    Ended up paying the ATO back in full approx 6 months later.
    The additional interest rate I had to pay was worth it to get an additional 40% more floorspace in the workplace (including the staircase).
    I was maxed out back then & unable to borrow elsewhere.
    I just put it down to a cost of just getting it done.
    No regrets.
     
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  3. Jmillar

    Jmillar Well-Known Member

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    Yep I've got a similar opinion - I'd rather pay a little extra in interest on the tax bill than do a fire sale on any of my properties.

    But if I can manage to convince them to give me an interest-free extension, better still! Just wondering if anyone has ever successfully negotiated with them...
     
  4. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    The ATO are quite accommodating. The process can be done online, by automated telephone and by speaking to someone. Just make sure you have a clear final date to avoid default.

    They likely wont charge interest but may. Typically you seek remission after its paid. They arent permitted to approve interest free extensions as this exceeds the Commissioners authority. But the Commissioner has power to remit
     
    Last edited: 27th May, 2019
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  5. Jmillar

    Jmillar Well-Known Member

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    Thanks for your help Paul. Just went through the automated process on the phone and their numbers include interest (GIC currently = 8.96% pa I believe). Is it common for them to refund the interest payment after you've finished the payment plan? My only real reason for needing the request is that my properties are taking longer to sell than anticipated. Perhaps I could set up a payment plan that involved me paying it within X months and then pay it off early?

    Any tips?
     
  6. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    In many cases they will charge and remit the interest almost automatically. I just looked at a client with such a payment plan to repay around $20K and checked if he had been charged interest which could have been deductible. He had full remissions each month

    If that fails to work pay it off then call and ask for remission.
     
  7. Jmillar

    Jmillar Well-Known Member

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    Thanks Paul.

    In this case I might set up a payment plan over a fairly long term and then beg them to remit the interest (if they don't automatically do it) at the end.

    Cheers
     
  8. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    The words - a fairly long term indicate concern. The ATO arent a default lender. They may reject the request if its unrealistic. Then its a collection issue. It can impact your credit record. If the debt is referred to the hobart team I will pray for you. They can be nasty and demand recovery and proof all lenders have refused you
     
  9. Jmillar

    Jmillar Well-Known Member

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    FYI I organised a 24 month payment plan. I'll end up paying it off in full in a few months and apply for them to refund the interest, which I'm told shouldn't be an issue.