Managing Interest Charges and Avoiding Penalties

Strategies to Avoid Interest Charges:

1. Lodge on Time: Ensure your tax return is submitted by the deadline, even if you can’t pay the full amount immediately.
2. Pay as Much as You Can: Partial payments reduce the balance subject to interest.
3. Set Up a Payment Plan: Contact the ATO to arrange a manageable payment schedule.
4. Request Remission: In some cases, the ATO may waive or reduce interest charges if you can demonstrate genuine hardship or a valid reason for the delay.

By staying organised and addressing tax obligations promptly, you can minimise or avoid interest charges. The Cado Tax app simplifies this process with tools for tracking payments and deadlines.

For more information on managing unpaid taxes, visit our Penalties and Interest guide.

FAQs

Q: Can I appeal an interest charge?
A: Yes, you can request a remission of interest charges if you believe there are valid grounds, such as financial hardship or ATO errors.

Q: What happens if I don’t pay my tax debt?
A: Unpaid tax debts accrue daily interest. The ATO may also take further action, such as garnishing wages or placing a hold on your bank account.