Interest-free payment plans for BAS debts

Cashflow pressures can hit even the most diligent business owners, and when BAS debts fall overdue, the penalties can pile up quickly. The good news is that the ATO offers an interest free payment plan for BAS debt for businesses that meet certain criteria.

Who is eligible for an interest free payment plan?

You may qualify if your business meets all of the following conditions:

Has an annual turnover under $2 million
Owes $50,000 or less in recent BAS/IAS amounts that have been overdue for up to 12 months
Has a good payment and lodgment history, including:
- No more than one payment plan default in the past 12 months
- No outstanding activity statement lodgements
Can’t access finance (e.g. a bank loan) through normal business channels
Can demonstrate ongoing business viability

👉 For full eligibility details, see the ATO Payment plans – interest-free payment plans for overdue activity statement amounts

How the BAS debt payment plan works

If you’re eligible, the ATO requires you to agree to a direct debit payment plan that clears the amount within 12 months. While their letters may still mention interest, it will be remitted as long as you keep up with the plan.

It’s also essential to keep all future BAS and tax obligations up to date while the plan is active.

Why an interest free payment plan matters

Overdue BAS debts usually attract the ATO’s general interest charge (GIC), which can grow fast and make it even harder to manage cashflow. An interest free arrangement not only reduces financial stress but also helps you stay compliant while protecting your business’s viability.

Key takeaway for business owners

If your business is struggling to pay a BAS or IAS debt, don’t ignore it. An interest free payment plan for BAS debt could give you breathing space to recover. At Inspire, we can help assess whether you qualify and assist in setting up a plan with the ATO.

📆 Key Dates for April:

➡️ March 2025 BAS & IAS Lodgement & Payment due by 21 April 2025 (monthly lodgers only – quarterly lodgers due in May)
➡️ Superannuation for the March Quarter (1 January 2025 – 31 March 2025): Payment is due by 28 April 2025.
➡️ Companies seeking to register R&D Activities conducted during the Year Ended 30 June 2024 have until April 2025.
➡️ Payroll tax (QLD): Monthly payroll tax return and payments for March 2025 are due by 7 April 2025.

📅 Upcoming Key Dates 📅

💰 2024 Financial Year Tax Return:
• Entities with total income exceeding $2 million in the 2023 Financial Year must lodge by 31 March 2025.
• Individuals and trusts with a tax liability of $20,000 or more in their latest lodged return must lodge by 31 March 2025.

📊 February 2025 BAS/IAS Lodgement & Payment due by 21 March 2025 (📆 monthly lodgers).
🏗️ QBCC Annual Financial Reporting: Licence categories SC1 and SC2 must submit their reports by 31 March 2025.

Selling your business as a going concern

Ordinarly if you sell your business, you will likely be liable for GST on the sale. However, if you sell as a going concern, the transaction will be GST-free.

A sale qualifies as a going concern if:

Everything necessary for the business’s operation is included in the sale.
The business activity is operated up until the sale date.

A sale of a going concern is GST-free if all of the following conditions are met:

The sale involves a payment.
The buyer is either registered or obligated to register for GST.
Both the buyer and the seller have a written agreement stating that the sale qualifies as a going concern.

Can “going concern” apply to commercial properties?

Yes! “going concern” may apply to the sale of commercial properties in certain scenarios, such as:

A commercial property that is subject to an active lease.
A property that is essential to the operation of a business being sold.
A fully tenanted building where all leases are included in the sale.
A partially tenanted building, provided that vacant units are actively marketed or undergoing maintenance.

If you’re keen to explore changing accountants, we have a non-obligation process to do that. The first step is booking a strategy call with one of our accounting team. It’s a free 20-minute zoom or phone call where you get to meet us to manage your questions.

From that point, you can consider doing a “Look Under The Hood” with us. There is no obligation to change accountants, but we give you a second opinion if you’re paying too much tax.

Throughout that process, we can identify any problems we see with your current setup. Anything that your current accountant hasn’t claimed, or tax you may have overpaid, and strategies of how we might fix that going forward. We can run through with you once you book with us.

Things you should consider before a super rollover

Things to Consider Before a Super Rollover

Insurances
Rolling over your super could cause any attached insurance policies to lapse, leaving you uninsured. Consult a financial advisor to review your insurance needs and consider alternatives, such as partial rollovers, to maintain coverage during the transition. It’s also wise to review your insurance if it’s outdated or your life circumstances have recently changed (e.g., marriage, a new family member or property purchase).
Notice of Intent (NOI)
If you’re planning to claim a tax deduction for personal super contributions, submit a valid NOI form to your current fund and receive acknowledgement before rolling over. Once the rollover is processed, you won’t be able to claim the deduction.
Payment Timing and Details
For SMSFs, rollover payments must be completed within three days. Use the Payment Reference Number (PRN) in the transfer description to ensure proper allocation.
Bank Daily Limits
Check your bank’s daily transfer limits if rolling over from an SMSF. If the limit is insufficient, request a temporary increase or coordinate multiple transactions with your accountant.

Additional Considerations:

Fees: While super funds can’t charge exit fees, other costs like buy/sell spread fees may apply.
Investment Options: Compare the investment options and returns of your new fund with your existing one.
Lost Benefits: Check for member perks (e.g., discounted advice) that may not transfer to the new fund.
Timing: Be mindful of market conditions, as fluctuations can affect your final balance.

From that point, you can consider doing a “Look Under The Hood” with us. There is no obligation to change accountants, but we give you a second opinion if you’re paying too much tax.

Thinking of releasing equity in your home or investment property?

In recent months, we’ve seen the ATO ramp up its efforts to chase outstanding tax debts, with a significant increase in the issuance of Director Penalty Notices (DPNs), particularly to companies with larger debts ($75K and above).

A Director Penalty Notice (DPNs) is an ATO notice that makes company directors personally responsible for unpaid taxes like PAYG, super, or GST if their company doesn’t pay.

The recent surge includes DPNs related to tax debts that accumulated over time, particularly from the COVID-19 lockdown periods when enforcement was reduced.

If your business has overdue tax debts, it is crucial to have a clear plan to manage the debt by paying it or entering into a payment plan.

Directors who fail to act quickly can expect the following in addition to DPNs:

Wind-up actions: The ATO has been actively pursuing the winding up of companies with unmanageable tax debts.
Garnishee notices: These letters can be sent to your bank and customers, requiring them to pay the ATO directly instead of your business.
Credit reporting: The ATO may also report your company's debt to credit reporting bureaus, impacting your ability to access future financing.

Don’t let tax debts spiral out of control. Now is the time to engage with the ATO or reach out to your accountant to assist you with managing and reducing your ATO liabilities.

From that point, you can consider doing a “Look Under The Hood” with us. There is no obligation to change accountants, but we give you a second opinion if you’re paying too much tax.

Superannuation for contractors

Businesses engage contractors for specialised skills or to streamline costs. But keep in mind, that superannuation isn’t always off the table.

You generally don’t pay super for independent contractors. But, if the contract is wholly or principally for their labour, you might be liable. This applies even if they have an ABN, regardless of their earnings amount.

So, a seemingly genuine “contractor” might be classified as an “employee” under the Super Guarantee Act.

Here are the key factors that could trigger super on contractor payments:

Tip: If the individual (i.e. independent contractor) is performing work for you through an entity such as a company or trust, they would not be considered an employee under the Super Guarantee Act.

From that point, you can consider doing a “Look Under The Hood” with us. There is no obligation to change accountants, but we give you a second opinion if you’re paying too much tax.

Is there really a "Sales Gene"?

A recent study published in Harvard Business Review suggests that genetics may play a significant role in sales performance. Researchers from MIT Sloan found that top salespeople often possess “adaptive learning” skills, enabling them to quickly process information, adapt to changing customer needs, and identify selling opportunities in real-time.

It is easy to train people by repetition and sheer volume on memorising scripts and the use of simple yet effective language to convert leads into sales. However, “adaptive learning” is difficult and may be impossible to train.

So next time you are hiring for a position that requires an element of selling, consider adding assessments that measure candidates’ “adaptive learning” capabilities. This could include role-playing scenarios, problem-solving tasks, or even simple questions that test their ability to think on their feet.

From that point, you can consider doing a “Look Under The Hood” with us. There is no obligation to change accountants, but we give you a second opinion if you’re paying too much tax.

Is a tax depreciation schedule worth it for your rental property?

Not all properties are created equal.

Newer properties often offer higher tax deductions from depreciation compared to older ones. However, even if your rental property is older, it’s still worth consulting a quantity surveyor specialist like BMT to assess its potential.

Additionally, if you’ve recently completed major renovations on your rental property, a depreciation schedule can be particularly valuable.

The fee payable to a licenced quantity surveyor specialist for preparing the tax depreciation is tax deductible too.

From that point, you can consider doing a “Look Under The Hood” with us. There is no obligation to change accountants, but we give you a second opinion if you’re paying too much tax.

Will Australia ever get a 20+ year
fixed mortgage?

The idea of locking in a mortgage rate for two decades or more might seem like a pipe dream for Australian homeowners. Australian banks currently offer a maximum of 10-year fixed mortgage, however, other developed countries like the U.S. or France currently offer 25 or even 30-year fixed mortgage rates.

During a recent House of Representatives hearing, the CEO of National Australia Bank (NAB), Andrew Irvine, provided evidence on the popularity of variable-rate mortgages with offset accounts. While these accounts offer flexibility and potential savings, Labor MP Tania Lawrence argued that their popularity is partly due to the limited availability of other loan options, such as longer-term fixed rates.

The question of whether Australia will ever see 20+ year fixed mortgages remains unanswered. While there is a growing demand for such products, challenges such as interest rate risk and regulatory hurdles continue to hinder their widespread adoption.

From that point, you can consider doing a “Look Under The Hood” with us. There is no obligation to change accountants, but we give you a second opinion if you’re paying too much tax.

Interest-free payment plans for BAS debts

Who is eligible for an interest free payment plan?

How the BAS debt payment plan works

Why an interest free payment plan matters

Key takeaway for business owners

Selling your business as a going concern