How to Assist a Client Using ATO Tax Debt Negotiation

Couple being assisted with ATO debt

Do you have a client with a large ATO debt? Or maybe you are experiencing tax debt yourself? United Debt Assist is excited to announce our partnership with a specialised ATO tax debt negotiation expert. They have formerly worked at the ATO and bring insights and knowledge to facilitate optimal financial outcomes for all parties.

Working with clients looking to refinance a sizable ATO debt is challenging. Finding the right finance solution to consolidate the debt and ensuring the deal fits the lending criteria takes time. If a deal like this lands on your desk, solutions are available. With the help of tax debt negotiation, it is possible to consolidate outstanding personal tax liabilities, current ATO business debts, or legacy tax debt from past failed businesses.

What are the consequences of ATO debt?

Not many consumers are aware that as of July 1, 2017, the Australian Taxation Office have had the power to disclose information about businesses with outstanding business tax debt to credit reporting agencies. The parameters include whether the business has a tax debt of $10,000+ that is at least 90 days overdue and not under arrangement. This measure is intended to encourage businesses to pay their tax debts in a timely fashion to avoid damage to their credit rating.

The quicker the client engages with the ATO to find a resolution, the better it is for both the client, and their credit profile.

There has recently been changes to the lending landscape and tightening of credit-risk appetite by the big banks. Now, specialist lenders can provide finance solutions for brokers with a client looking to refinance ATO debt.

Do you have a scenario where the ATO debt exceeds the available equity available to resolve the debt?

Engaging a specialist tax negotiator to review the tax debt can considerably help your client meet the lending requirements or LVR of the chosen lender.

This is why United Debt Assist has extended our service offering by partnering with a ATO tax debt negotiation expert. Tax negotiators can assist with lodging applications for remission (removal) of General Interest Charge and Penalties on ATO debts. They can also help with negotiating or renegotiating optimal and sustainable payment arrangements for your clients.

How does ATO tax debt negotiation work?

With eight years’ experience either working for the ATO or as a tax negotiator, our partner has formed strong relationships with decision makers at the ATO and has a deep understanding of critical timeframes and escalation points. These aspects enable the negotiator to deliver optimal outcomes for both brokers and their clients. They do this by submitting strong persuasive applications of remission and payment proposals to the ATO.

Tax negotiation can enable your client to repay a lower amount to the ATO. However, it can also help them to keep their business and avoid possible bankruptcy.

Additionally, clients who have paid off their tax debt with a loan that you have facilitated may be eligible for a remission of General Interest Charge and Penalties retrospectively.  Essentially, this is a remission of interest on a debt that has already been paid in full. In such cases, an approved remission application would result in a credit directly transferred into your client’s nominated bank account.

Case study of a mediation recently completed for a broker

  • The client was looking to leverage the equity in their property and had secured a conditional approval with their broker through a specialist lender. However, this was not enough to clear the tax debt in full, which was a lending condition.
  • The client had been ignoring their tax debt due to a failed marriage breakup two years prior. This had caused him to suffer from severe depression.
  • The negotiator contacted the ATO and reassured them by advising of their involvement.
  • After a discussion with the client and reviewing his tax position, it was found that the total tax bill included $60,000 of interest.
  • The negotiator prepared and submitted a detailed application for remission of the interest.
  • The ATO approved this application which reduced the debt. It also enabled the refinance to proceed, and the debt to be repaid at the lower negotiated amount.
  • The client’s refinance proceeded with the ATO debt being cleared in full. The client could now move forward without the pressure and burden of the ATO debt.

Are you aiming to reduce your client’s debt to enable their refinancing, or simply achieve an outstanding outcome? If they’re eligible for ATO tax debt negotiation – United Debt Assist can help. Get in touch to find out more.


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