ATO hardship help and deferrals: support for businesses going through a rough patch

Is it worth telling the ATO you’re struggling?

Yes — and the earlier the better. Many business owners avoid the ATO when things go wrong, hoping to fix the problem first and explain later. It’s an understandable instinct, but it usually makes things harder. The ATO’s options are widest before a debt becomes overdue and narrowest after firmer action has started.

The ATO’s own support pages describe its approach to people in difficulty as working with them to find a way forward, and they include real examples: a small cattle station owner recovering from illness granted extra time to lodge and pay; a sole trader whose relocation costs disrupted BAS payments having interest remitted in full. Outcomes depend on individual circumstances, but the point stands — asking is worthwhile.

What support can the ATO offer?

Support	What it does	Who it suits
Extra time to lodge	Defers a lodgement due date	Illness, disaster, records lost or unavailable
Extra time to pay	Defers a payment due date	Short, temporary disruption with a clear recovery
Payment plan	Spreads the debt over instalments	Most businesses with a manageable debt
Interest-free plan	Remits GIC on eligible activity statement debt	Small businesses meeting all criteria
GIC remission	Removes some or all interest	Delays caused by circumstances outside your control
Penalty remission	Reduces or cancels penalties	Late lodgement with a good reason
Release	Releases some debts in serious hardship	Individuals only — not GST, PAYG withholding, SGC or DPNs
Specialised teams	Tailored help for complex situations	Larger or more complicated cases

How do you ask for help well?

1. Call or use online services before the due date where possible.
2. Explain what happened briefly and honestly — dates, events, impact.
3. Say what you can do now. “I can lodge on time and pay a set amount each fortnight” is more useful than “I can’t pay”.
4. Have evidence ready — medical certificates, insurance claims, letters from customers or your accountant.
5. Keep lodging. Lodging on time, even without payment, protects you, particularly for GST and PAYG withholding.
6. Write down the reference number and the name of the person you spoke to.

Your registered tax agent can do all of this for you. If you pay someone else to deal with the ATO, check they’re registered with the Tax Practitioners Board.

What free help is available outside the ATO?

You don’t have to work this out alone, and you don’t have to pay for advice to get started.

• Small Business Debt Helpline — 1800 413 828. Free, independent and confidential financial counselling for small business owners, from qualified financial counsellors. Open weekdays.
• National Debt Helpline — 1800 007 007. Free financial counselling, useful for sole traders and for personal debts sitting alongside business ones.
• Your accountant or tax agent. They know your numbers and can deal with the ATO directly.
• ASIC’s professional registers if insolvency advice becomes necessary — check that any liquidator is registered.

These services don’t sell anything. If you’re feeling overwhelmed, calling one of them first is a very good move. Many people tell us afterwards that talking it through with someone neutral made the next decision far easier.

When is hardship help not enough?

Deferrals and plans buy time. They work beautifully when the problem is temporary: an illness, a flood, a customer who’ll pay in two months. They work less well when the problem is structural — when new tax keeps building faster than old tax is paid — or when firmer action is already under way. In those cases:

• a loan can pay the ATO out and give the business a longer, steadier runway — see tax debt loans;
• a restructure through a registered practitioner may suit a business with liabilities under $1 million that meets the conditions — see small business restructuring;
• and if the business can’t recover, a free counsellor or registered professional can explain what that means for you personally.

Looking after yourself

Tax debt is stressful, and stress makes good decisions harder. If it’s affecting your sleep, health or relationships, it’s worth speaking to your GP or a support service as well as a financial one. A business problem is solvable; you deserve support while you solve it.

An illustrative example

A family-run nursery lost much of its stock in a flood. The owners called the ATO the following week, explained what had happened and provided insurance correspondence. They were given extra time to lodge and pay the upcoming BAS while the insurance claim was processed, and later asked for remission of the interest that accrued in that period. Because they engaged early and kept the ATO informed, no firmer action followed.

Keep records of every conversation

When you speak to the ATO, note the date, the name of the officer, the receipt or reference number and exactly what was agreed. If you’re granted extra time, diary the new date and set a reminder a week before. If circumstances change again, call before the new date passes. A clear record makes later requests — including GIC remission — far easier to support.

Want to know whether funding could help?

If you’ve talked to the ATO and still need a longer runway — or a deadline is approaching — start an enquiry. There’s no credit check to enquire, your details stay with our team instead of being shopped to other lenders, and a real person will talk it through calmly. If free help is the better next step, we’ll say so. Accurate information helps us point you the right way.