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Do you have debt and taxes owed to the government?

The Australian Tax Office and its government bodies are examples of the types of organisations that you do not want to ‘put off’ paying your debts to. Not only are there hefty penalties associated with debts not being paid on time, but there are also heavy repercussions that may impact you, your travel and future interactions with these government bodies.

What happens if you do not pay debt by the due date?

It is not uncommon for the Australian Taxation Office and other government bodies to charge very high interest on debt that are typically more than 10% per annum. If you do not pay your debt on time, you can also expect that:

  • you will be contacted soon after the due date
  • you will be charged interest on your unpaid amounts
  • any future refunds or credits will be used to repay the amounts you owe
  • selected debts may be referred to external collection agencies for collection
  • stronger action may be taken if you are unwilling to address your debt or repeatedly default on agreed payment plans

More extensive actions taken by government agencies

If you are someone who regularly defaults on your agreed payment plans with the government or make it difficult to cooperate and work with the government to repay your taxes and debts, stronger action will often be taken to penalise you. These could include, but are not limited to:

  • Issuing garnishee notices to your employer, bank or real estate which requires them to pay your money directly to us to reduce your debt
  • Issuing a director penalty notice which allows legal proceedings to begin to recover the debt or withholding tax refunds
  • Issuing your employer with a direction to pay Super Guarantee Charge (SGC)
  • Summoning you to court
  • Filing a creditor’s petition to declare you bankrupt

These actions can vary depending on whether you are an individual, business or sole trader, and the amount of debt owed. There are also extensive actions that have been taken by the Department of Immigration and Border Patrol, working alongside Centrelink to stop people from leaving the country if they have family assistance or social security debts until these are paid.

Appealing government debt

If you do not agree with a charge that you have been requested to pay to any of the government agencies, you can dispute this payment. All you have to do is ask for a review and appeal of the decision. However, it is likely you will still need to pay the funds for the short-term, and later request a refund if the appeal is granted.

Key takeaway

If you have a debt to the Australian Taxation Office or other government body, you should take immediate steps to address it. If you are concerned about the amount of debt you may owe to Centrelink, the ATO or another government agency, an experienced defence lawyer will be able to help.

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