Tax Debt

All about the general interest charge

If you have a tax debt, then you already know that the ATO charges you interest on it. This is the 'general interest charge' (also known as the GIC). The rate of the general interest charge is calculated each quarter. It is roughly equal to around twice a standard mortgage rate. The exact ...

What happens to a tax debt during an objection or appeal?

If you've been audited by the ATO or received an estimate of tax, then you may not agree with the new amount the ATO says you owe. You have options for disputing these debts. Usually, the first step is to object to the ATO's decision about the debt. If the objection isn't decided in ...

Looking for a template letter to make a remission request to the ATO?

There's a template letter online for making a remission request to the ATO for the general interest charge. It's designed for accountants to use for their clients. I do not recommend using this template letter unless you're an accountant who knows what you're doing and you have solid writing skills. Why don't I recommend ...

How the ATO’s general interest charge works

The ATO charges the general interest charge (the GIC) on most unpaid tax debts. There is legislation that sets out how to calculate the rate of the general interest rate. You can read more about that here. Daily compounding The rate determined under the law is an annual rate. However, the general interest charge imposed by ...

The rate of the ATO’s general interest charge

The ATO charges general interest charge on most unpaid tax debts. The rate of the general interest charge is set each quarter. The ATO usually announces the rate two weeks before the start of the quarter. Recent general interest charge rates In recent times, the rate has hovered around 8 to 9%: QuarterAnnual rateJanuary – March 20207.91%October ...

Statutory demands issued by the ATO

The way the ATO collects a tax debt differs depending on whether the taxpayer is an individual or a company. The first few steps are generally the same - phone calls, letters, perhaps a garnishee notice. For a company, the ATO may also issue a Director Penalty Notice to the directors, making them personally ...

Applying for a release from your tax debt

If you’re struggling to pay a tax debt, it’s important that you know what your options are. In certain cases, you may be able to have the ATO completely release you from your tax debt. This can happen if you would suffer ‘serious financial hardship’ if you had to pay the debt. Who can ...

5 ways the ATO collects tax debts from a company

  Need help to deal with a tax debt?   RELATED ARTICLES: Director penalty notice - personal responsibility for company tax How does the ATO collect tax debts? eBook - How to deal with your tax debt.
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