Latest Accounting News
Hot Issues
Estate planning considerations
5 checklists to support your business
Are you receiving Personal Services Income?
What Employment Contracts Does My Small Business Need?
The superannuation changes from 1 July
Hasty lodgers twice as likely to make mistakes, ATO warns
Landlords who ‘double dip’, fudge deductions in ATO crosshairs
Most Spoken Languages in the World
Tax Time Checklists - Individuals; Company; Trust; Partnership; and Super Funds
Compare your business
2024 Year End Tax Planning Guide (Part 2)
ATO to crack down on rental income, WFH deductions this tax time
How to Draft a Standard Form Contract
GST, PAYG withholding a ‘significant portion’ of $50bn tax debt
ATO changes will make it harder for over 42,000 small businesses.
The Deadliest pandemics in History
Budget breakdown – Federal Government Analysis
Winners & Losers
Federal Budget 2024
2024 Year End Tax Planning Guide (Part 1)
Medicare levy surcharge OR basic health insurance ?
ATO warns of ‘serious penalties’ for unlawful tax scheme promoters
ACCC scam report
Employees taking more sick days - and it's getting worse
Foreign residents selling property in Australia
How much does negative gearing really cost – an overview and an opinion?
The Shortest-reigning Monarchs in History
FBT Reminder – Odometer Reading
ATO’s debts on hold campaign prompts new IGTO guidance
A comprehensive collection of small business benchmarks
The 2025 Financial Year tax & super changes you need to know!
Articles archive
Quarter 2 April - June 2024
Quarter 1 January - March 2024
Quarter 4 October - December 2023
Quarter 3 July - September 2023
Quarter 2 April - June 2023
Quarter 1 January - March 2023
Quarter 4 October - December 2022
Quarter 3 July - September 2022
Quarter 2 April - June 2022
Quarter 1 January - March 2022
Quarter 4 October - December 2021
Quarter 3 July - September 2021
Quarter 2 April - June 2021
Quarter 1 January - March 2021
Quarter 4 October - December 2020
Quarter 3 July - September 2020
Quarter 2 April - June 2020
Quarter 1 January - March 2020
Quarter 4 October - December 2019
Quarter 3 July - September 2019
Quarter 2 April - June 2019
Quarter 1 January - March 2019
Quarter 4 October - December 2018
Quarter 3 July - September 2018
Quarter 2 April - June 2018
Quarter 1 January - March 2018
Quarter 4 October - December 2017
Quarter 3 July - September 2017
Quarter 2 April - June 2017
Quarter 1 January - March 2017
Quarter 4 October - December 2016
Quarter 3 July - September 2016
Quarter 2 April - June 2016
Quarter 1 January - March 2016
Quarter 4 October - December 2015
Quarter 3 July - September 2015
Quarter 2 April - June 2015
Quarter 1 January - March 2015
Quarter 4 October - December 2014
Quarter 3 July - September 2014
Quarter 2 April - June 2014
Quarter 1 January - March 2014
Quarter 4 October - December 2013
Quarter 3 July - September 2013
Quarter 2 April - June 2013
Quarter 1 January - March 2013
Quarter 4 October - December 2012
Quarter 3 July - September 2012
Quarter 2 April - June 2012
Quarter 1 January - March 2012
Quarter 4 October - December 2011
Quarter 3 July - September 2011
Quarter 2 April - June 2011
Quarter 1 January - March 2011
Quarter 4 October - December 2010
Quarter 3 July - September 2010
Quarter 2 April - June 2010
Quarter 1 January - March 2010
Quarter 4 October - December 2009
Quarter 3 July - September 2009
Quarter 2 April - June 2009
Quarter 1 January - March 2009
Quarter 4 October - December 2008
Quarter 3 July - September 2008
Quarter 2 April - June 2008
Quarter 1 January - March 2008
Quarter 2 April - June 2007
Quarter 2 April - June 2006
GST, PAYG withholding a ‘significant portion’ of $50bn tax debt

Small businesses are increasingly falling behind on debts, with two-thirds of all debt owed by small business, the ATO warns.


In a recent address, ATO Tax Commissioner Rob Heferen stressed the importance of small business owners meeting their obligations, with small business debts to the ATO continuing to climb. 

The Tax Office is currently chasing over $50 billion in collectable debt, with 65 per cent of all collectable debt owed relating to small business, said Heferen, speaking at the Council of Small Business Organisations Australia (COSBOA) summit.

Of the collectable debt owed by small business, around three-quarters or 74 per cent relates to activity statements.


"This means a significant portion of the amount going unpaid is GST collected from consumers or PAYG withholding, withheld from employees pay," said Heferen.

"We are seeing an increasing number of businesses fall behind on these types of payments, from which point it is very difficult for businesses to get back on top of their obligations and remain viable."

The freshly minted commissioner told the COSBOA summit that ensuring taxpayers pay their tax and super obligations will remain a key focus for the ATO.


In September of last year, deputy commissioner Vivek Chaudhary said the ATO’s collectable business debt had nearly doubled over the last four years. In June 2019, taxpayers owed $26.5 billion while, at the time of his speaking, the debt had climbed to $50.2 billion.

These amounts only reflect debt owed by businesses, though they make up 90 per cent of all collectable debt. Chaudhary called the growth “concerning” and “unsustainable.”


“Too many businesses have accumulated unsustainable levels of debt. We want to guard against our payment culture turning from consistently paying on time to paying late,” he said.

Chaudhary said late payment creates an unlevel business playing field, and this idea was echoed in Heferen’s Thursday address.

“Many of your members are telling us how concerned they are about the unfair competitive advantage businesses not complying with ATO obligations are getting over those who are doing the right thing,” said Heferen.

“There’s also a significant risk of businesses trading whilst insolvent and creating a situation where all creditors – including suppliers and employees miss out on what they are owed.”

Lessons from debts on hold

Heferen also told conference attendees that the ATO last year learned the “very hard lesson” that its ability to waive taxpayer debt was very narrow.

Though he did not go into details, Heferen was likely referring to the Australian National Audit Office’s disapproving review of the agency’s approach to debts on hold.

Where recovery of a debt does not make economic sense, typically because it is for an insignificant amount, the ATO will often put the debt collection on hold.

The ATO began advising taxpayers that it would be offsetting the debts against returns or credits last year after the ANAO raised concerns with the ATO's previous practices for the debts following the end of the pandemic.

The awareness campaign was later paused following concerns raised by the community.

The Taxation Ombudsman this week called for the ATO to wipe interest from the approximately $15 billion the ATO said it was actively looking to claw back with these debts.

On Tuesday afternoon, Karen Payne told ABC Drive the ATO was right to collect the debts, but that it should “have regard to the circumstances in which the debt … has been raised and communicated to taxpayers.”

“If the debt is very old and you haven’t been advising taxpayers that it exists, then it would seem fair to me that any interest component should be remitted,” added Payne.




Nick Wilson
05 April 2024


Liability limited by a scheme approved under Professional Standards Legislation