The Australian Taxation Office (ATO) is actively pursuing the recovery of billions of dollars of outstanding tax liabilities. Having eased off on debt collection during the COVID-19 pandemic, the ATO has warned individuals and businesses with significant tax liabilities, who have not yet made contact, that it will be taking further action. If you’re struggling to meet your tax obligations, here’s more on where to go to get help with managing tax debt.

Focus on tax debt collection

Over the past two years, the ATO has taken a tailored approach to payment enforcement of outstanding tax debt, in response to the COVID-19 pandemic and the impact it’s had on Australians businesses.

A key part of the ATO’s recovery program included writing to around 70,000 businesses with significant outstanding tax debts, urging them to make contact and develop an acceptable repayment plan. Failure to comply would result in the ATO taking further action, including disclosing the taxpayer’s tax debt information to credit reporting agencies.

“Disclosing business tax debts is an important action we’re taking to encourage taxpayers to engage with us and take action to resolve their debts, help level the playing field, and support businesses to make more informed decisions on who they provide credit by making overdue tax debts more visible,” says the ATO.

“By signalling our intention to make a disclosure, we hope clients will act on this warning.”

Important to act quickly

With the ATO now actively seeking repayment of outstanding tax debt, businesses are urged to contact the ATO about a repayment plan or risk facing a default being recorded on their business’s credit file for up to five years.

A default record such as this would negatively affect the business’s credit rating and impact their ability to raise funds or borrow credit in the future, as many lenders take a dim view of unpaid tax debt and credit defaults.

The key thing is for businesses and individuals to engage with the ATO if they have outstanding tax debt and to work out a plan to repay the debt. Taxpayers who are facing financial difficulties in meeting their tax obligations should still contact the ATO directly or consult a registered tax professional for advice.

Get help with paying

The ATO has a number of helpful resources on its website, including support measures to help taxpayers repay tax debt.

Payment plans
Find out how to set up a manageable payment plan to pay down your debt.

Interest-free payment plans for overdue activity statement amounts
Work out if your small business can pay activity statement amounts off interest-free over 12 months.

Deferral of HELP or SFSS compulsory repayment
Work out if you can defer or amend your compulsory payment or overseas levy.

Managing payments
How to manage your payments, including prepayments and payment transfers.

If you don’t pay
Find out what happens if you don’t pay and how to engage with us early so we can help you deal with your debt.

For financial advice tailored to your specific situation, contact a Mortgage Express broker today. Depending on your circumstances, we may be able to help source a financial solution that provides additional funding or restructuring of business finance to help you repay your tax debt. There are lenders that will consider tax debt for refinancing, so don't hesitate to contact your local mortgage broker to find out if this could work for you.

While all care has been taken in the preparation of this publication, no warranty is given as to the accuracy of the information and no responsibility is taken by Finservice Pty Ltd (Mortgage Express) for any errors or omissions. This publication does not constitute personalised financial advice. It may not be relevant to individual circumstances. Nothing in this publication is, or should be taken as, an offer, invitation, or recommendation to buy, sell, or retain any investment in or make any deposit with any person. You should seek professional advice before taking any action in relation to the matters dealt within this publication. A Disclosure Statement is available on request and free of charge.

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