ATO Repayment Arrangements and Longer-Term Options
ATO repayment arrangements can be useful, but for businesses already carrying significant tax debt, a payment plan may not be enough.
More flexible payment arrangements may create an opportunity for some businesses, but there are usually eligibility requirements and strict obligations to maintain lodgements and ongoing payments.
For some businesses, a payment arrangement may be all that is needed. For others, the debt is already too large and some form of compromise or formal restructuring may be required.
An ATO payment arrangement does not always solve the underlying problem. Interest may continue to accrue, defaulting on the arrangement can quickly put the business back under pressure, and Director Penalty Notice risks can remain if lodgements fall behind or the arrangement defaults.
By comparison, a successful Small Business Restructure or Voluntary Administration can freeze interest, compromise debt, stop recovery action and provide a more sustainable long-term outcome.
If the business is no longer viable, it may also be the right time to discuss an orderly closure or liquidation before the position becomes worse.
