Can I set up a payment plan online if I owe more than $100,000?

Where the $200,000 line sits

The threshold is per account, based on the total amount owing. Below or at $200,000 you can set the plan up yourself. Above it, you must phone the ATO's debt line and negotiate, which means questions about cause, capacity to pay and evidence. That process is covered in payment plans over $200,000.

Three things push a sub $200,000 debt out of the online channel anyway:

• two or more plans defaulted on or cancelled in the past 12 months
• a warning of firmer recovery or legal action received in the past 6 months
• a proposed term longer than 24 months

If any of those apply, the amount does not matter; you are negotiating by phone.

Why $100,000 still matters

$100,000 is not a payment plan threshold, but it is the threshold for two other things that make an unmanaged debt at this level riskier.

• Credit reporting. A business with an ABN that owes $100,000 or more, overdue by more than 90 days, and not effectively engaging can be reported to credit bureaus after a 28 day notice of intent to disclose. A payment plan that is kept counts as engaging and stops this. A defaulted plan removes that protection. See tax debt credit reporting.
• Firmer action generally. Larger debts attract earlier attention. Garnishee notices and, for companies, director penalty notices are more likely on a six figure debt that is not under an arrangement. See garnishee notices.

The practical point: at this size, the fact that you can set the plan up online in ten minutes is an advantage. Use it before a warning letter closes the channel.

Before you set it up

Because nobody reviews an online plan, the ATO is not checking whether you can afford it. You are. On a $150,000 debt over 24 months the instalment is roughly $7,000 a month including interest at 11.43%, and your next BAS still has to be paid on top. Check that against an ordinary month using how much should I offer per month? If it does not fit, it is better to phone the ATO now and negotiate a longer term than to set up an online plan that defaults, which then counts against you.

Also lodge everything first. The system assesses the whole account, and an unlodged BAS or return either blocks the plan or breaches it later. And check whether the debt is on one account or spread across several, because each account needs its own plan; see can I have two plans at once?

What to do next

1. Confirm the exact balance and which accounts it sits on in ATO online services.
2. Lodge any outstanding BAS or returns before you start.
3. Run the numbers for a 24 month term plus your next BAS against an ordinary month's cash flow.
4. If it fits, set the plan up online today. If it does not, phone the ATO with a longer term proposal and an upfront amount.

More questions: 26 ATO payment plans questions answered · Full guide: ATO payment plans