ATO - Payment Plan, tell me this can not happen

This women has never worked a day in her life as she has men supporting her lifestyle, oops that's right she also reads coffee cups, mmmm $80 for 10 minutes of utter rubbish, then there are those that need some good news.

This is the only thing she would see if she looked inside my coffee cup ;)

IMG_1474-300x200.jpg
 
Know someone who has finally had to cough up $50,000 CGT, thought she could/would get away with it as it was her only property. This property had been rented out for 10+ years. She completely ignored the CGT issue and was shocked when she received a letter from ATO, requesting - $50,000 this also included outstanding HEC fees from some 10 years ago that she was never going to pay back.

Wont bore you with all the details, however she does not have a job (no income she discloses) and believes she can work a payment plan with the ATO - $50 per month:eek: even though she used the proceeds from the sale of this property to purchase another property which she rents out and lives off this income.

Please tell me that can not happen?? Seriously I pay my taxes like everyone else, but when I was told she would negotiate $50 per month it absolutely infuriated me. This is just so wrong

Also, did I mention she will be getting $48,000 compensation from a car accident she recently had, she mentioned that this has to be disclosed to ATO, but she wants to keep those funds, well of course she would.

My rant for the day

MTR:)
I have been on a payment plan with the ATO for the last 3 years, and will be for the forseeable future.

The reality is that all around this Country folks are doing it tough - daily life, and in business.

I have been saying it for a few years now about our economy, but I keep getting shot down by many here in the fishbowl. They think I am only talking about my own personal position - wrong.

In my case, I have not overspent on stock, or skimmed loads of income for myself, etc. I have been guilty of not cutting staff and other operating costs sooner than I should have (one I couldn't cut until my first 5 year lease was finished).

I have discussed this economic climate with both my MB and my accountant over the past few years at various times, and according to them it is soo common now it is not funny to have folks on payment plans..

The ATO - thankfully - are very good at allowing people to negotiate a payment plan; it is not in their interest to shut folks down - and they don't in most cases.

Of course; you have to be pro-active; get ahead of the problem, discuss it with them with the right attitude and from my experience they are very accommodating.

But it's not free, or easy - they charge you interest on what's owing, and if you miss a payment for any reason they can harden up in no time.
 
BayView - most people are on either quarterly GST instalments or quarterly tax instalments - which are all payment plans I guess.

tell you what though - if it weren't for payment plans I'd have been stuffed in 2008.

enforceable too, even though it's an estimate.
 
BV, its like buying a PPOR in a bushfire prone area and then complaining about it when the fires come

your area, or country area as you say, business is far tougher to do well, sure you can set up a n IGA in a tiny town and do ok, with no real ups and downs, but when you open a cafe in a regional or out of town area, then you really are taking a bigger risk, its like regional property

I for one, dont think the economy is great and the best is to come,

look at the unemployment rate
 
BV
I am sure many businesses are struggling at the moment and I think ATO providing a payment plan is necessary, however what happens if a business can not make good on the payment plan?? I don't think ATO take too kindly to this.

My g/friends partner's business recently went into administration, his accountant was negotiating with ATO but he could not meet his commitments, at the end there is only so much they will do.

MTR
 
$50 pm wouldn't even go close to paying the interest, let alone be enough for an acceptable payment plan. The rate is currently over 9%

From memory, the interest paid is deductible- however if you borrowed from equity to repay, interest paid on that borrowing is not deductible.
 
BV
I am sure many businesses are struggling at the moment and I think ATO providing a payment plan is necessary, however what happens if a business can not make good on the payment plan?? I don't think ATO take too kindly to this.

My g/friends partner's business recently went into administration, his accountant was negotiating with ATO but he could not meet his commitments, at the end there is only so much they will do.

MTR

it does also depend on the size of the debt as to their "attitude".

I remember being on the phone to the ATO and I could hear a conversation next to my operator while she was typing - talking about $750k worth of taxation owed and the person handling that call was not a quarter as cordial as the person talking about my forgotten $2500 instalment.
 
$50 pm wouldn't even go close to paying the interest, let alone be enough for an acceptable payment plan. The rate is currently over 9%

From memory, the interest paid is deductible- however if you borrowed from equity to repay, interest paid on that borrowing is not deductible.

This is making sense
 
BV, its like buying a PPOR in a bushfire prone area and then complaining about it when the fires come
It's not comparable. You can research the hell out of a bushfire prone area, but at the end of the day one will eventually come along.

But with a business; you can research a lot of factors which might suggest future success...population growth, demographics and changes to demographics, transport improvements etc.

There are businesses (like mine) which have been in operation for decades (that's one of the reasons why I bought it).

your area, or country area as you say, business is far tougher to do well, sure you can set up a n IGA in a tiny town and do ok, with no real ups and downs, but when you open a cafe in a regional or out of town area, then you really are taking a bigger risk, its like regional property
We are not exactly "country".

Admittedly we have recently installed our 2nd set of traffic lights :D, but we are only an hour from CBD, and pretty much an "outer suburb" of Melb these days.

Some businesses (the restaurants) are starting to really fly down our way now - since we moved down here in 2000, the steady increase of weekend and holiday traffic has allowed more sophisticated cafes and restaurants to open and prosper; whereas it was really only the fish and chip shop and a couple of pizza places that could survive winters and the seasonal flow when we first moved here.

The more sophisticated and trendy these cafes become, and the more there are; the more people seem to want to come here.

I for one, dont think the economy is great and the best is to come,

look at the unemployment rate
Yes; we only have to look between the lines and rhetoric at the indicators; and talking to various folks around the traps confirms a lot.

We are being carried along by real estate around the Country right now, but it will run out of steam later this year; then look out.
 
BV
I am sure many businesses are struggling at the moment and I think ATO providing a payment plan is necessary, however what happens if a business can not make good on the payment plan?? I don't think ATO take too kindly to this.

MTR
Yes, agree. They are not a benevolent society of course, and will get hasrsh if required I'm sure.

When they talk to you, one of their questions they ask is "What can you afford to repay?"

They also ask; "Why can't you afford to pay what you owe?"

I feel like being a smart @rse and saying; "Why do ya reckon?" But that is not a good strategy, of course.

So, you state a figure you are comfortable with, then they go off the line for a minute to confer with someone (apparently) and then come back on and say it's approved and away ye go.

I have set up a weekly direct debit and they send me a statement each month. I can pay more as often as I wish, and it simply comes off the balance. Quite easy.

Not ideal; but having it is much more appealing to the Gubb than multitudes of businesses closing down and folks unemployed all over the place.

Besides; they make money out of the interest they charge too.

The trick is in working out what you can afford each week.

The other problem is being able to pay future taxes when they are due. You have to get ahead of the problem and talk to them each time.
 
(no income she discloses)

I think you've just named the solution. Doubt the ATO would be happy that she's dodging repaying owed tax, by not declaring her income. See how long her 50/wk lasts then.

I love how people get so worked up over some small fry dodging a few thousand dollars in taxes (if you can even call it that) while the real "parasites" pay less proportionally than someone on minimum wage :rolleyes:

But when you get a large number of people doing the same. I personally wouldn't consider 50k tax bill that they are actively dodging 'small fry'. 'Small fry' is the person who claims the maximum allowable deductions without a reciept each year on their PAYG tax return.
 
BV is right. You need to be proactive.

Keep lodging the returns on time even if you can't pay them.

Try and keep your current tax debts up to date.

Remember unpaid super can be chased by the ATO too.
 
Back
Top