ATO (tax office) payments by credit card

[serfty]

A bit of a timeline ...

Card Surcharges were introduced in 2003. The Reserve Bank of Australia allowed merchants to start adding surcharges to lower transaction fees.

Tax Payments by credit card came in in 2009.

In 2016 the Australian Competition and Consumer Commission (ACCC) banned excessive surcharges that charged more than the actual cost of processing.

In 2024 it was noted that payment processors could and were supplying services to businesses at a surcharge (for example of 2.6%) which could legally be passed directly on to customers with the business receiving rewards (e.g. 1 point per $ charged).

By the end of this year, taxes will no longer be able to be paid by credit card.

So it has only been 17 years that tax payments have been able to be paid by credit cards.

It seems government policy is that collecting taxes by credit card is fine as long as the entity paying the tax directly covers the cost of such payment. Without the ability to surcharge this policy cannot be followed.

 

[Doctore1003]

I don’t understand all the drama. There are plenty of payment processors out there that businesses can use to pay the ATO with a CC!

 

[albyd]

I know I’m talking my own book but I think that the cost is small compared to ensuring we all pay our taxes and ensuring enforcement costs are kept to a minimum? There's a cost to be bourne in enforcement - even if you get judges to order costs against defendants, costs aren't what was incurred. Yes, it's punitive but they're not 100%. Just my 2 cents worth.

 

[Duffa]

Just wanting to confirm with people here. At present it's still possible to pay the ATO with credit card and it will incur no surcharge? Have a family member going after a nice fat amex sign on bonus and has enough tax to pay to knock out the minimum spend.

Would that work or does anybody see an issue?

There is a 2 month window for all ATO payments, surcharge free, before they stop accepting credit cards.
Just make sure the card earns points for ATO spend.
At my last look, Amex is 0.5 per dollar

 

[Duffa]

I don’t understand all the drama. There are plenty of payment processors out there that businesses can use to pay the ATO with a CC!

Yes, at 2% per point or worse. Which isn't far off revenue fares.

 

[burmans]

I don’t understand all the drama. There are plenty of payment processors out there that businesses can use to pay the ATO with a CC!

Totally agree, and I read somewhere that only around 3% of payments were made by CC anyway! Ignoring that we currently do have a window of opportunity I was surprised that it was even that high given the advantages of using a CC are (with some minor exceptions) long gone.

 

[kpc]

Wonder whether we can still use GCs to pay ATO (by phone) post Nov 30...I suspect not

 

[Doctore1003]

I don’t understand all the drama. There are plenty of payment processors out there that businesses can use to pay the ATO with a CC!

Yes, at 2% per point or worse. Which isn't far off revenue fares.

I’m referring to all the complaints about how businesses need to use CCs to manage cash flow.

If you need to pay the ATO with a CC for that purpose, then cop the 2% fee. Taxpayers shouldn’t have to absorb the cost!

 

[ken86c]

As taxpayers, people's tax money always goes to things they don't receive any benefit from, I guess this just adds another thing to the long list taxpayers have to absorb. Cost of running a government

 

[torks]

I’m referring to all the complaints about how businesses need to use CCs to manage cash flow.

If you need to pay the ATO with a CC for that purpose, then cop the 2% fee. Taxpayers shouldn’t have to absorb the cost!

Exactly, they are making a mountain out of a molehill.

If cashflow is an issue call up the ATO and organise a payment plan, tell them you'll pay in full 30 days late and I've never seen them reject that offer or charge late payment interest.

 

[AuSammy]

Exactly, they are making a mountain out of a molehill.

If cashflow is an issue call up the ATO and organise a payment plan, tell them you'll pay in full 30 days late and I've never seen them reject that offer or charge late payment interest.

Exactly, a relative of mine has been doing this off and on for years. The ATO has always been very supportive and set up a payment plan, no penalties and pays the bill gradually over several months. Needed the meagre credit card limit to purchase supplies for the business.

 

[flydoc2]

Today’s first round of commentary. Still unclear where this might land, with not entirely consistent messaging,, and the PM and Treasurer both out of the country..

Foreign Minister Penny Wong says the government cannot force the tax office to accept credit card payments

Environment Minister Murray Watt says the "various ministers" will be making their expectations clear to the tax office about its decision to ban credit card payments

Minister for Defence Industry Pat Conroy has moved to smooth over the [disparate] responses from Labor ministers about the Australian Tax Office's (ATO) decision to stop accepting credit card payments, saying they have been appropriately urging the ATO to consult businesses’

Live: Wong says government cannot force tax office to accept credit card payments

Penny Wong says the government does not have the power to direct the tax office to reverse its decision to stop accepting credit card payments. Follow live.

www.abc.net.au

 

[kpc]

Today’s first round of commentary. Still unclear where this might land, with not entirely consistent messaging,, and the PM and Treasurer both out of the country..

Foreign Minister Penny Wong says the government cannot force the tax office to accept credit card payments

Environment Minister Murray Watt says the "various ministers" will be making their expectations clear to the tax office about its decision to ban credit card payments

Minister for Defence Industry Pat Conroy has moved to smooth over the [disparate] responses from Labor ministers about the Australian Tax Office's (ATO) decision to stop accepting credit card payments, saying they have been appropriately urging the ATO to consult businesses’

Live: Wong says government cannot force tax office to accept credit card payments

Penny Wong says the government does not have the power to direct the tax office to reverse its decision to stop accepting credit card payments. Follow live.

www.abc.net.au

Wong will never answer a Q directly but will alwzys skate around the bush like a true professional politician.

All she said was the government will encourage local business representatives and ATO to discuss the situation. The government cant force the ATO to do anything as the ATO is independent.

My response would be bullsh.t...the government can certainly pressure the ATO if they want to...

 

[albyd]

The ATO has always been very supportive and set up a payment plan, no penalties and pays the bill gradually over several months. Needed the meagre credit card limit to purchase supplies for the business.

I don't think the ATO do this for free. If they do approve a payment plan, it's done at GIC rates in the teens which are no longer tax deductible and that interest compounds daily under the guise of compensating the taxpayers for use of their money". It sounds pretty punitive to me but what do I know?

 

[HMcM]

Card Surcharges were introduced in 2003. The Reserve Bank of Australia allowed merchants to start adding surcharges to lower transaction fees.

Slight context on that as its a bit more complicated and can be important. In 2003 the action taken was to prevent the card companies from banning surcharges. Card surcharging was not mandated but the card companies themselves prevented it in their terms. In 2003 the RBA controlled the terms the card companies could set.

There is a 2 month window for all ATO payments, surcharge free, before they stop accepting credit cards.
Just make sure the card earns points for ATO spend.
At my last look, Amex is 0.5 per dollar

1MR / $ with the Platinum Charge Card. But it's more for the 200,000 sign on bonus.

 

[HMcM]

I don't think the ATO do this for free. If they do approve a payment plan, it's done at GIC rates in the teens which are no longer tax deductible and that interest compounds daily under the guise of compensating the taxpayers for use of their money". It sounds pretty punitive to me but what do I know?

I used to work for the ATO about a decade ago so my info may be a little out of date but I've set up plenty of these payment plans. Letter of the law always included GIC, but it was often waived unless the person was obviously taking the piss.

 

[AuSammy]

I don't think the ATO do this for free. If they do approve a payment plan, it's done at GIC rates in the teens which are no longer tax deductible and that interest compounds daily under the guise of compensating the taxpayers for use of their money". It sounds pretty punitive to me but what do I know?

Actually (depending on circumstance) they do. Obviously not for everyone as per HMcM.