Having an ATO debt does not automatically mean your business is in serious trouble. The best outcomes are usually achieved when businesses lodge on time, remain compliant and engage early.

Key points:

• Lodge all BAS and tax obligations on time, even if you can’t pay.
• Keep current GST, PAYG and super obligations up to date.
• Contact the ATO early if you’re experiencing financial difficulty.
• Don’t ignore ATO correspondence or payment demands.

What Happens If I Fall Behind?

The ATO has a range of recovery powers and generally escalates its actions when businesses fail to engage, repeatedly default on payment arrangements, or stop lodging their obligations.

Recovery action may include:

• Payment demands and collection activity
• Garnishee notices
• Credit reporting
• Director Penalty Notices (DPNs)
• Legal proceedings and insolvency action

The earlier you act, the more options you will usually have available.

What Options Do I Have?

If your business is struggling with ATO debt, there are often solutions available depending on the circumstances and the viability of the business.

Possible options include:

• Paying the debt in full
• Entering into a payment arrangement
• Refinancing or asset sales
• Small Business Restructuring (SBR)
• Liquidation or personal insolvency solutions in more serious cases

Businesses with strong compliance histories, up-to-date lodgements and a clear plan for improvement are typically in a much stronger position when seeking assistance.