# ATO advice: how to stop tax bills sneaking up



## Jack Malarkey (Jan 11, 2016)

The Australian Taxation Office has provided the following advice via its Small Business Newsroom about how to prevent tax bills from sneaking up (https://www.ato.gov.au/Newsroom/sma...ng/Stop-tax-bills-sneaking-up/?sbnews20180214):


*Stop tax bills sneaking up*










*29 January 2018*

Did you know you don't need to wait for a bill from us to pay your tax? Prepaying can help stop tax bills sneaking up and putting a strain on your cash flow.

You can make payments at any time, for any amount and as often as you like, such as when your clients pay you.

When it comes to lodging your activity statements, you will still need to report full amounts, but you will only need to pay the balance owed.

To prepay:
get your payment reference number (PRN) through the business portal, or myGov (if you are a sole trader)
decide how much to pay using our online tools and calculators
use your usual payment method.
You can also pay your income tax in advance by entering into pay as you go (PAYG) instalments.

Remember, registered tax agents and BAS agents can help you with tax advice.

*Next steps:*
Read our tips on managing payments
Contact us for help to manage your tax bill
*Find out about:*
Payment reference number (PRN)
How to start paying instalments
How to pay


----------



## Jack Malarkey (Jan 11, 2016)

I find the best way to make provision for future tax bills is to have a separate bank account into which I transfer each week 30% of the amount Uber has paid into my main bank account that week. 

I find that, for me, this covers me for GST and income tax (including mandatory quarterly income tax instalments). 

I also have a ‘replacement car fund’ into which I periodically make contributions based on the difference in the then value between my current car and a proposed replacement car.


----------



## Sydney Uber (Apr 15, 2014)

Jack Malarkey said:


> The Australian Taxation Office has provided the following advice via its Small Business Newsroom about how to prevent tax bills from sneaking up (https://www.ato.gov.au/Newsroom/sma...ng/Stop-tax-bills-sneaking-up/?sbnews20180214):
> 
> 
> *Stop tax bills sneaking up*
> ...


Great, relevant info Jack! We have a regular debit coming out of the business account that just about covers our tax bills ahead of time.

Having one set up also telegraphs your "intention" to the ATO that you want to stay in their good books. We went through a bad patch in 2010 and again in 2014-15. Owed them $1000s. But the case manager simply asked if we could increase the regular debits by X and worked out it would take us 2 years to clear the debt. I asked if that was acceptable and not incur any fines. He assured me our past record of compliance and having spoken to them before they called us was all that was necessary to avoid any further action.

He then went on to say the ATO knows how tough it is for small business, and employ an advisory board specifically to work out issues like I had.


----------



## UberDriverAU (Nov 4, 2015)

Personally I put adequate money aside into a separate tax holding account. I want the interest income rather than letting the ATO have it.


----------

