ATO extends credit card payment option to 30 June 2027, silent on initial consultation process

“This will provide more time for the ATO to engage with small business and other taxpayers who currently rely on credit cards, provide more detailed information to those affected, and consult on targeted options to support impacted taxpayers.”

8-day backflip, consultation shortcomings

Following the ATO’s announcement that it would cease accepting credit card payments last week, accountants spoke out on the significant small business impacts.

“You’ve just made it harder again in a really hard environment, and it’s unnecessary; it’s totally unnecessary,” Tripolino Accountants senior accountant Anthony Tripolino told the brand.

The latest extension of the time frame was welcomed by users on LinkedIn; however, they said that the protracted period is not a long-term solution.

“This is a welcome step, but it’s not the end of the issue,” independent member Allegra Spender said in a LinkedIn post.

“The bigger question is why the impact on small businesses wasn’t properly considered before the original decision was announced,” accountant Joe Kaleb said in his post.

“This week would have been a perfect example, where the ATO would have been compelled to consult small business before pulling a payment option, instead of a midnight press release on the day the surcharge ban commenced,” shadow treasurer Tim Wilson said in a statement.

Accountants Daily twice reached out to the ATO for more details on its consultation process prior to its 1 October announcement.

The Tax Office did not answer the brand’s questions.

This follows the ATO’s attempts to negotiate lower rates with credit card companies to enable it to continue to accept credit cards.

“The ATO will continue to engage with card companies on this matter,” Treasury said.

‘Nail in the coffin’

While the ATO has extended its time frame for the credit card payment method to 2027, accountants stressed that the eventual removal of the option still poses a threat to small businesses.

“I was horrified. I immediately knew that banning credit cards for ATO payments would just be honestly the nail in the coffin for small business,” accountant and founder of Tax Direct Accounting, Belinda Raso, told Accountants Daily.

“Most people don’t realise how much small business actually use it as cash flow for them.” 

She said having the ability to just put a GST BAS payment straight on a credit card is something that has become more commonplace for small businesses.

“I want to see the rationale and the thinking behind this process, because as far as I can see, there’s none. There’s no thinking, there’s no consultation, there’s nothing, and this is too big a decision to make without that,” she said.

“A consultation paper should have gone out, there should have been a draft, it should have been asking for feedback from tax practitioners.”

Raso predicted that following the implementation of the change, small businesses will start to close, and businesses will start to reduce staff hours, doing more of the work themselves, which could have flow-on effects on unemployment.