Do you earn more than the tax-free threshold in Australia? Are you paying your taxes on time and accurately? If you do, it’s excellent, but have you ever thought, what if you forget to pay your tax debt and pay it late?

Once in a while, this thought might have come across your mind or you haven’t paid your taxes yet and think it’s too late. The reason for paying ATO late could be numerous; maybe you found the Australian taxation system too complicated, or you were too busy and didn’t get the time to lodge your tax returns.

However, the question is what happens if I pay the ATO late? To find the answer to this question, keep reading our exclusive blog, and to pay your taxes on time, contact our reliable tax agents in Australia today!

What Happens if I Pay the ATO Late?

Individual taxpayers don’t pay their taxes on time since they forget, while small businesses sometimes have cash flow issues. By contacting ATO and discussing your problems, everything can be sorted out. However, still, if you are unable to pay your taxes and want to know what worse could happen, here’s what you need to know: –

If you don’t pay ATO taxes on time, it can: –

• Charge interest on your unpaid tax amounts
• Contact taxpayer after the due date through SMS, letters, phone, and messages in my Gov.
• Use credits or future credits to repay the amounts the taxpayer owns.

ATO can also take stronger legal action against taxpayers unwilling to sort out things and pay taxes on time. If you cannot pay on time, don’t forget to submit your business activity statements and tax returns, it will send a positive message that you are aware of your obligations, and you may escape the penalty for failing to lodge on time.

When is a Stronger Legal Action Taken Against Taxpayer?

Now you know what ATO generally does with taxpayers who don’t pay their taxes on time but are willing to work with the taxation office to sort out things. But here is when stronger legal action is taken against taxpayers –

• Seems to be indulged in Phoenix activities
• When taxpayers are unwilling to work with the ATO
• Repeatedly default on agreed payment terms and plans
• Detection of continuous payment avoidance and are subject to an audit
• Unable to pay the taxes but are not doing anything to resolve the issue at the same time

So, when taxpayers are unwilling to pay their taxes, ATO takes strict legal action against them. Pay your taxes on time with an accurate income report to avoid legal action by ATO against you.

Legal Actions ATO May Take Against Taxpayers Avoiding Taxes

After familiarizing yourself with when ATO takes strong legal action against taxpayers, you might want to know what legal steps ATO can take. So, here is what legal action ATO can take against taxpayers unwilling to work with it to sort out the problems: –

• The ATO may file a claim or summons with the court of your territory.
• ATO can file a bankruptcy notice to make you bankrupt if you don’t make a payment plan with them within 21 days of receiving a bankruptcy notice.
• Australian Taxation Office can issue a statutory demand for payment to a business that has not paid its tax debts, which requires the company to pay the overall debt or make a payment plan within 21 days with the ATO.
• Once the court orders a company to wind up, the assigned official will sell the asset of a company’s assets. However, it is only done when the company cannot pay its debts or if negotiation with a suitable payment plan is impossible.

Final Verdict

Sometimes individuals and small business owners cannot pay their taxes on time. But many are unaware of what ATO can do if they don’t pay their taxes on time. The ATO can charge interest and work with you to make a payment plan. However, if you are unwilling to work with ATO, they may take strict legal action against you.

All the relevant information on the strict legal actions ATO can take against taxpayers unwilling to work with ATO is mentioned above in this blog. To know more details or pay your taxes on time, you can contact our tax agents; they are well-versed in local taxation laws and always ready to assist our beloved clients.