When and how to pay your tax
Generally, if you owe more tax than has been withheld from your income during a financial year, you must pay that tax by 1 December of the following financial year. You can pay your tax by cheque, money order, direct debit, BPAY or at a post office.
While an appeal is pending
The fact that an The review of the decision of a lower court by a higher court. If an appeal is successful, the higher court can change the lower court’s decision. is pending A document that sets out what a person wants to happen to their money and other property after they die. not excuse you from meeting your taxation Legal responsibility, enforced by civil or criminal courts. by the date specified on the notice of assessment. However, where you are disputing an assessment, the ATO will often agree not to take recovery action while the objection is being decided.
If your objection is disallowed and you exercise your appeal rights, provided there is a genuine dispute, the ATO may continue to defer recovery action provided you pay 50 per cent of the amount in dispute. This amount is refundable, with interest, if you succeed. If you are not successful, the GIC applies to late payments (see ‘Penalties, interest charges and offences relating to tax returns’, above).
If you receive a tax refund due to a successful objection, review or appeal, you will be entitled to interest on the amount of the refund for the period in which the tax was overpaid. Any interest received in this way will form a part of your The total of a person’s annual pay and other earnings hat is used to calculate the income tax they must pay., though the refunded tax does not.
Extension of time and repayment by instalments
The ATO may grant an extension of time (essentially, postponing actions to recover tax payable). This extension would not normally exceed 12 months and will not go beyond 15 June in the tax year the assessment is issued. The ATO needs to be satisfied that Legally binding or effective. reasons exist to justify the extension and you will also have to pay GIC.
Hence, when you request an extension of time, or permission to pay by instalments, you should prepare a statement that outlines:
- your tax file number, the assessment number, the tax year, the amount of tax involved, and the due date for payment;
- a brief statement of reasons for the application, including your financial position; and
- an The first step in agreeing to make a legally binding agreement. An offer must be accepted before there can be a legally enforceable contract. For example, a person can offer to sell their car for $5000 and a buyer can accept the offer and pay that purchase price. to pay by a specific date or by instalments beginning and ending on a specific date.
Ideally, you should make an application at least 10 days before the due date for payment but the ATO may extend this time. If you are seeking an extension for more than six months, you should supply the ATO with a statement of your assets and liabilities and other information. Because different parts of the ATO deal with objections and applications for time to pay, these two matters should be kept separate. You should write two letters, one for the objection and one for the time-to-pay application.
The ATO’s Power to choose whether to do something or not. For example, a judge may have discretion to allow a party extra time to complete a document if it would be unfair to enforce the legal time limit. to remit further tax is limited to situations where the inability to pay was caused by circumstances outside your control or where ‘special circumstances’ exist. If further tax is to be remitted, some proof of your ‘innocence’ needs to be shown.
Relief from payment
In particular circumstances, the ATO may grant relief from tax liability either totally or partially, where it is of the opinion that the collection of the full amount would entail you suffering serious hardship. This might be because of any loss you have suffered, your financial circumstances, or your circumstances if you are a dependant of a deceased taxpayer.
You should make your application for relief to the ATO before the due date for payment, with details of your income, expenditure, assets and liabilities. It generally takes some time for the ATO to A written law made by parliament. Also called an ‘Act of parliament’, ‘statute’ or legislation., but in the interim the ATO should take no further legal steps to force payment. You can download the ‘application for A document signed by parties ending a court action. The party who began the action agrees to drop it, often in exchange for a payment by the other party. Also called terms of settlement. from payment of some taxation liabilities’ form from the ATO’s website and mail it to the ATO, or send your complete form using the online tax A person who acts for someone else. They can make decisions, carry out tasks or make agreements for the other person. For example, if you ask someone to bid for you at an auction they will be acting as your agent. portal or the business portal.