ATO releases details of fuel response payment plan

The ATO will also remit general interest charge (GIC) and other penalties and allow PAYG instalments to be varied where there has been a reduction in taxable income.

Eligible taxpayers will be able to access the ATO fuel response payment plan with no upfront payment, a three-year payment plan period of 36 equal monthly instalments and GIC remission.

The ATO said it will make a decision to remit any general interest charge that has accrued from the time of a taxpayer's application to the date of the third monthly instalment, provided they:

• Pay all instalments agreed under the payment plan for three months.
• Bring any outstanding lodgments up to date in that period.

The ATO fuel response payment plan is available by application until 30 June 2026. Taxpayers will not need to make a further application for GIC remission for this period, it said.

"The ATO will continue to assess the situation and support options available. Updates will be made to this information if the ATO will continue or change this support beyond 30 June 2026," the ATO said.

Eligibility for the ATO fuel response payment plan

The Tax Office said taxpayers who are ABN holders and meet four criteria are eligible to apply for the ATO fuel response payment plan.

The taxpayer must have experienced an increase in business operating costs, and these costs must either be directly attributable to higher fuel costs or indirectly attributable to high fuel costs because of increased transport, logistics or other supply chain costs.

They must also have a new tax debt or be unable to serve an existing tax debt.

Third, the taxpayer must be able to demonstrate a reduced capacity to pay due to higher fuel prices.

"This is separate from a general downturn in business or ordinary cashflow issues. This means that if fuel prices hadn’t been so high, you anticipate you would have been able to meet your payment obligations, including your instalments under existing payment plans," the ATO said.

"We may cancel your payment plan if lodgments are not up to date within this period. Up-to-date lodgments are also required for us to make a decision to remit GIC under the fuel response payment plans."

Steps to take before accessing the ATO fuel plan 

The ATO advised taxpayers that before applying for the payment plan, they should first consider whether they are eligible for an ATO fuel response payment plan and gather information and evidence supporting their eligibility.

Where taxpayers are not eligible, the ATO said businesses should prioritise the following actions:

• Pay employees their wages and ensure you pay their super guarantee entitlements as a priority.
• Pay creditors so they can pay their employee entitlements.
• Keep up to date with your lodgments and if you are expecting a refund, lodge as soon as you can.
• If money is owed, pay what you can as soon as you can. For the remaining debt, you can set up a normal payment plan through online services.
• Contact your registered tax or BAS agent to discuss the options that are right for you.

ATO Commissioner Rob Heferen said the ATO recognised that the fuel situation may severely affect some businesses, disrupting business supplies and day-to-day operations and creating uncertainty and financial pressures.

"This is why we’re supporting affected businesses in these challenging times," Heferen said.

"If high fuel costs are affecting your business’ ability to meet tax payment obligations, and you are having difficulty getting working capital financing from your bank or normal source of credit, please let us know, so we can support you through this period."

Heferen said businesses should consider seeking advice from their registered tax professional on what options might work for them.

"The ATO can’t waive tax debts, but if you can’t pay in full at this time due to high fuel costs, it’s important to pay what you can and arrange a payment plan with us as early as possible."

"It’s still important to lodge on time. Once you lodge and have up-to-date records, we can help you understand your tax position and find the best support for you."

The ATO said registered tax and BAS agents can play a vital role in supporting their clients who are impacted by high fuel prices.

"Where your clients are likely to receive an activity statement refund, manage your workflows to prioritise their lodgments to help them manage cashflow," the Tax Office said.

"If your clients are eligible for the ATO fuel response payment plan, you can lodge an application on their behalf provided you have their written authority to do so."

Tax professionals should also consider the ATO’s existing support mechanisms such as payment plans, lodgment and payment deferrals and penalty and interest remission and guide their clients as appropriate, it said.