Large ATO Bill: What's the most beneficial payment method?

Lday on 18/05/2023 - 15:49

Fellow OzBargainers,

I am expecting a large ATO bill to come in as a result of a one-off capital gain event last financial year. The bill would be >$50,000 as such I'm looking to see what can we do to maximise the adjacent benefits of this payment. We are looking at payment due in the next 4 weeks.

  1. Multiple credit cards: This will have potential points but some would cap points earned on ATO or not recognised at all. What is the best credit card out there assuming the approval not an issue to obtain?
  2. Gift Cards: Potential double/triple benefits -> Points earned on credit cards when purchasing gift cards, some gift card has Everyday Rewards/Flybuys accelerators. However, I also need to consider activation cost on the gift card and whether they can be used to pay ATO?
  3. Third party payment providers (Citibank Pay, Paypal, sniip, etc): straightforward to earn points on most credit cards, but fees could be significant for large amount

Anything else that I may have missed???

Financial

Related Stores

Australian Taxation Office
Australian Taxation Office

Comments

  • Muzeeb on 18/05/2023 - 15:53
    +18

    Gift Cards

    Apple gift cards only (so I've heard)

  • ESEMCE on 18/05/2023 - 16:07
    +1

    Credit Card is the only payment method mentioned that ATO will accept.

    https://www.ato.gov.au/General/Paying-the-ATO/How-to-pay/Oth…

    EDIT I've now worked out the "gift card" you're referring to is a Prepaid Credit Card.

    • day on 18/05/2023 - 17:05
      +1

      There's no mention of ATO accepting gift cards as payments at all, but throughout this forum you can find people suggesting that they do accept Apple Gift Cards…??

    • HeWhoKnows on 19/05/2023 - 09:21
      +3

      Be aware that fees apply for using credit cards:

      Fee
      American Express 1.45%
      MasterCard – International 1.99%
      MasterCard – Domestic Debit 0.20%
      MasterCard – Domestic Credit 0.77%
      Visa – International 1.99%
      Visa – Domestic Debit 0.40%
      Visa – Domestic Credit 0.72%

      Hence any benefit obtained from points is far outweighed by the fees you pay

      Preferred method is BPay

      • lgacb08 on 19/05/2023 - 09:40
        +2

        Coles prepaid mastercard fee is only 0.2% so if you can get enough of them from Coles 10% promo you can save a fair amount. But OP time frame is tight.

        • HeWhoKnows on 19/05/2023 - 09:43

          I doubt OP can buy a $50,000 prepaid mastercard
          besides they only appear to sell $50 and $100 mastercard Gift cards now
          So not a viable option

          So like i said - BPay is the best option
          Its about minimising costs really

          • lgacb08 on 22/05/2023 - 15:51
            +1

            @HeWhoKnows: Have you been in lala land? Coles has been selling the $250 for ages. There are other brands too some go as high as $500. But if you buy them now without that 10% discount the extra fees means you better off paying with credit card straight up.

      • daft009 on 19/05/2023 - 19:51

        There are other ways and earn more points.
        Have to use the points wisely to offset the fee though

        • HeWhoKnows on 21/05/2023 - 20:50
          -1

          Cost of credit card fee nearly always outweighs benefit from points.
          Cards with points nearly always have higher fees for that reason.
          They have to offset the cost of the points somehow.

    • sareth on 19/05/2023 - 13:21

      Not true, you can also pay (with zero fees, to boot) via direct deposit with Citi PayAll, or BPay with Beemit.

  • roozmik on 18/05/2023 - 16:07
    +1

    Can you even use a credit card?

    I know you're not paying BAS, but I pay the ATO quarterly BAS and the only options are BPAY or EFT.

    But I thought there was some particular credit card or service that you can use to make BPAY/EFTpayments.. never used it though.

    • ESEMCE on 18/05/2023 - 16:09

      That's what I first thought, but yeah apparently they do.

  • WoodYouLikeSomeCash on 18/05/2023 - 16:07
    -2

    I’d advise against gift cards as that seems very risky for (likely) not much reward.

  • jv on 18/05/2023 - 16:10
    +21

    I pay cash…

    10% Discount if you don't want a receipt. (You need to specifically ask for this over the phone)

    • ChrisLevo on 18/05/2023 - 16:23

      That was worth the up-vote.

  • jv on 18/05/2023 - 16:14
    -2

    Anything else that I may have missed???

    yes

    a one-off capital gain event last financial year.

    that should have been declared and paid in last year's tax…

    • plmko on 18/05/2023 - 16:25
      +2

      that should have been declared and paid in last year's tax

      That's exactly what OP is doing

    • JimmyF on 18/05/2023 - 16:59
      +2

      that should have been declared and paid in last year's tax…

      Its paid when the return is done and lodged….

      I haven't done last years tax either, if you use an accountant, you can wait a little longer than the normal ;)

      • jv on 18/05/2023 - 17:00

        I haven't done last years tax either

        😲

      • day on 18/05/2023 - 17:06
        +4

        Yep, with a tax agent the deadline is May the year after

      • Yola on 20/05/2023 - 07:11

        In practice, you can be several years late without penalty as long as ATO owes you money. If you owe them you run the risk of being fined. I have never done this but I have known others that do. But not worth the stress; the longer you leave it, the more difficult it will be to sort out.

  • Gunther on 18/05/2023 - 16:17
    +5

    Credit Card with rewards point via BeemIt BPAY (as some have ATO payments on the exemption list)

    • SlickMick on 19/05/2023 - 09:19

      Why haven't I heard of this beemIt sooner??

      All the bills I've been bpaying from debit account to avoid creditcard fees :(

  • franco cozzo on 18/05/2023 - 16:21
    +2

    legos

  • Alekhine on 18/05/2023 - 16:35
    +2

    It’s actually a good question for a forum like this.
    I think most people don’t have many better ideas than the ones you have already suggested.
    One risky option is to delay payment and invest in shares to try to make a quick gain and then pay of / but that is probably too risky for some.
    Prepaid credit cards are good but you need an offer like the Coles MasterCard offer. There are risks with this as well. I heard of someone who had three cards with problems (two never activated despite being paid for and one had disputed transactions of $90).
    That person bought about 400 cards. So the the %error was about 1%.

  • CyberMurning on 18/05/2023 - 16:55

    amex black card.

  • JimmyF on 18/05/2023 - 17:01
    +2

    Anything else that I may have missed???

    For all those saying credit card, remember there is a 'fee', so any gain for paying with a credit card needs to be more than the fee. Also be aware, some cards excluding ATO from going towards the min spend to unlock the rewards etc.

    https://www.ato.gov.au/general/paying-the-ato/how-to-pay/oth…

    • Yola on 18/05/2023 - 20:31
      +1

      Using a credit card thru Beemit has no fee.

    • roozmik on 19/05/2023 - 09:19

      also a lot of credit cards have a cap on the number of points you can earn per month.

      e.g. they might offer 1 point per $1 up to 3000, and then after that you only get 0.5 points or something

  • ihbh on 18/05/2023 - 18:38
    +3

    Coles MC GCs almost 10% discount - need to get rid of fast to avoid hackers.

    • Neoika on 18/05/2023 - 19:02

      Or Vanilla

      • lgacb08 on 19/05/2023 - 09:42

        Vanilla is too painful to use, and not sure if ato accepts it as some has been declined in the past. Also prepaid Visa fee is higher than mastercard.

        • Yola on 19/05/2023 - 11:05

          I have used more than 50 Vanilla cards.

  • lostgoat on 18/05/2023 - 19:05
    +2

    Just get a boat and leave.

  • SmiTTy on 18/05/2023 - 20:23
    +5

    If you want, You can submit a request to split these out into installments over a set period (eg 12 or 24 months from memory). That buys you time to find giftcards or apply for credit cards to use for min spending requirements (altho ATO payments may not be counted for some credit cards… Or use sniip ). Even if u do this, u can still pay more whenever u want.

    • MITM on 22/05/2023 - 12:45

      If you're referring to a payment plan, there is usually a GIC (General Interest Charge) fee sometimes applied by the ATO at quite a high rate.

      • dammit on 13/06/2023 - 19:52

        10.46% at the moment per annum interest rate, even for payment plans!

        • lachhelix on 13/06/2023 - 19:59

          Lol, cheaper to put it on a credit card at that rate

  • t0087669 on 18/05/2023 - 23:24
    +2

    Bpay via beemit, get points with no fees

  • ramshead on 19/05/2023 - 08:00

    Assume you've made additional super payments up to the cap.

    • larndis on 19/05/2023 - 08:07

      A bit late for that, we're talking 2021-22 tax return

  • mehow on 19/05/2023 - 09:03

    you dont earn points if you pay a govt agency. Its in the terms and conditions

    • Yola on 19/05/2023 - 09:34

      I have had numerous CC and they always say this. However, I have received points for many eg. council rates. If you pay thru Beemit you do get points.

    • sareth on 19/05/2023 - 13:23
      +1

      Depends entirely on the provider. I received points for an ato payment.

  • Sweet3st on 19/05/2023 - 14:55

    Ask to pay by instalment then use Zip BPay.

  • bigsaver on 19/05/2023 - 18:05
    +1

    You can pay via credit card by using BeemIt BPay. That seemed to work fine for me in the past with no fees

  • sonome on 20/05/2023 - 14:08
    +2

    If you have a Citibank credit card, Citi payall is another (free) way of paying while getting points.

    • rickb on 24/05/2023 - 06:05

      I use the Payall method too. No fees and I collect the points.

    • Yola on 01/06/2023 - 16:57

      Is there a limit on how much you can pay to the ATO? And is it QFF points you can earn?

  • FrugalDealSeeker on 24/05/2023 - 05:33

    Beem, bpay

  • day on 01/06/2023 - 10:09
    +1

    Thank you for all the suggestions everyone.

    Just sharing what we ended up using for this, hopefully it will help:

    1. Citi PayAll: Most viable option given the large amount.
      Pros: 0% fee until October 2023, Qantas points earned on payment, extra 0.5 points per dollar earn for using PayAll, no additional ATO charge (treated as Bank Transfer)
      Cons: You need a Citi credit card, 7 days payment to ATO (be careful with due dates so that you're not charged interest), Factor time delay to pay off balances to cycle through card limit

    2. Coles Mastercard Prepaid GC: Opportunistic using the 2000 Flybuys point on offer (effectively 10% discount)
      Pros: 10% discount using Flybuys Dollar, Qantas points earned on purchase
      Cons: Very difficult to find $250 gift cards, $7 activation fee, 0.2% fee from ATO for using Mastercard Debit

    Overall the Coles Mastercard is almost not worth the effort and savings are eroded from the additional fees, not including cost of time to find, buy, and activate the gift cards.

    • rickb on 01/06/2023 - 10:13
      +1

      PayAll is the best option so long as Citi keep extending the fee-free offer. They have extended this on an ongoing basis. Timing it so that you pay your tax bill on time is key.

  • dm02 on 14/06/2023 - 12:45
    +1

    If you went for $100.00 Coles Mastercard using the previous 2k bonus points:
    - You will pay $105.00 for the gift card
    - You will receive $99.80 towards your ATO debt (after 0.2% ATO payment fee), plus $10 worth of Flybuys points
    - Total value is $109.80 for $105.00 payment

    If you go for $100.00 Coles Mastercard using the current 10% off:
    - You will pay $94.50 for the gift card
    - You will receive $99.80 towards your ATO debt (after 0.2% ATO payment fee)
    - Total value is $99.80 for $94.50

    If you go for $250.00 Coles Mastercard using the current 10% off:
    - You will pay $231.30 for the gift card
    - You will receive $249.50 towards your ATO debt (after 0.2% ATO payment fee)
    - Total value is $249.50 for $231.30

    Note that the 0.2% fee paid is also tax deductible as a cost of managing your tax affairs, so assuming that you do buy $50,000 worth of gift cards, you can get a $100.00 tax deduction

  • freeman on 26/11/2023 - 08:38

    Coles Mastercard didn’t work anymore?

    https://community.ato.gov.au/s/question/a0J9s000000P62Q/p002…

    Maybe Visa prepay works

    https://www.officeworks.com.au/shop/officeworks/p/activ-visa…

    • Yola on 27/11/2023 - 04:21
      +1

      I used this card to pay ATO in September this year, later than November 2022 when stated as not working in the ATO community post.

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