Why Your ATO Account Shows as Default or Overdue Even When You Paid on Time – Explained by a Tax Accountant.

If your ATO (Australian Taxation Office) account is showing as “default” or “overdue” even though you have been making payments on time, there are several common reasons this may happen.

At Fair Tax Accountant Geelong, our experienced Tax Accountant team regularly helps individuals and small businesses resolve ATO payment plan issues, overdue account notices, and payment allocation problems.

• Payment not yet allocated by ATO
• The payment has not been processed yet by ATO, can take 1-3 days to update.
• ATO has not allocated to the correct account,
• When you made the payment, put the wrong refence number

Even one incorrect digit in the PRN can cause the payment sit as UN-allocated. It is very important put the correct account number for Activity statements and Income tax Account seprately.

• Note, ATO will add interest rate (GIC) general interest charge currently at 7-8% for outstanding overdue payment. Always, recommended to make payment plant to avoid this scenario.

Other reason for showing as default is new lodgement :

• New lodgement create a new balance.

When there is new lodgement such as Activity statement or GST/BAS statement, it will create new account balance. The ATO system calculate the new account balance. Need to make exact amount as per the new BAS statement before due date or cancel the old payment plan and create a new payment plan for the whole outstanding balance. Do this before the new lodgement payment due date.

Otherwise, the existing payment plans will automatically default. And show as overdue and ATO will charge interest on the whole outstanding account.

In most cases, a “default” status is caused by technical issues, interest charges, a new lodgement, payment delay or paid after payment plans due date or paid different amount than the payment plans or paid to the wrong account, not just because you failed to pay.

A registered Tax Accountant can help identify where the payment has been applied and assist in correcting allocation issues with the ATO.

Fair Tax Accountant Geelong

At Fair Tax Accountant Geelong, we pride ourselves on offering affordable taxation, bookkeeping, and small business accounting services with exceptional customer care.

We are committed to helping clients receive the maximum refund or legally minimise tax while remaining fully compliant with ATO regulations.

f you need help with overdue ATO accounts, payment plans, BAS lodgements, or tax debt issues, contact Fair Tax Accountant Geelong today to speak with a registered Tax Accountant.