Do not accept an instalment merely because it has been proposed. Show what the business can support and what information is needed for the ATO to assess a realistic alternative.
Corporate Recovery Partners
01 / 06
The suggested instalment leaves wages unfunded
A tyre workshop discusses its tax debt with the ATO and receives a proposed repayment amount. The owner wants to agree immediately, but the bookkeeper calculates that the instalment would leave the next payroll short. The response needs current figures and a clear explanation, not a commitment the business already expects to miss.
Keep the correspondence and record whether an amount has been discussed, offered or formally agreed. Ask the registered tax agent to confirm the debts and periods included, along with any requested information.
Do not confuse a proposed arrangement with an existing one. If a deadline or enforcement notice is involved, have it assessed separately rather than assuming negotiation puts it on hold.
Use current receipts, wages, materials and other ordinary commitments to calculate payment capacity. Business.gov.au recommends showing when cash enters and leaves the business. Include new tax obligations rather than using every spare dollar for old debt.
Test a late customer payment and identify the assumptions that matter most. The alternative should come from the figures, not from a round number chosen to make the discussion easier.
Give the ATO or authorised agent the evidence supporting the proposed amount and timing. Identify missing records honestly and ask what further information is required. Avoid presenting a loan application or hoped-for sale as confirmed funding.
Ask the agent to explain interest and the full payment path. A smaller instalment can lengthen the arrangement, so the business needs to understand more than the first payment.
If ordinary trading cannot support any credible proposal, tell the accountant and a qualified insolvency adviser promptly. Do not repeatedly offer amounts that depend on delaying wages or creating fresh unpaid bills.
Keep a record of the response and who must act next. Until acceptance is confirmed, maintain the actual obligation and status in the forecast rather than marking the issue resolved.
