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  • ATO Debt Process

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    What to do when your client has a tax debt

    Communication is key to tackling debt

    We want to work with you to prevent or manage your client’s tax debt, regardless of the situation.

    Talk to us early so things don’t escalate. Remember to update the correspondence preferences for your clients so we can get in touch.

    How we manage debt

    We have a tailored approach to debt.

    Your client’s behaviour, individual circumstances and lodgment and payment history are used to determine the most appropriate action for a tax debt.

    We recognise that clients may occasionally experience short term cash flow issues that prevent them paying on time. To assist, we offer payment plans tailored to their individual circumstances.

    In the 2018-19 financial year 1,100,000 payment plans were granted, 810,000 for small business.

    Support for clients experiencing serious hardship is available in some circumstances.

    Prevention and support

    We want to make it as easy as possible to pay tax on time.

    To help we have tools, payment channels and self-serve payment options.

    1,050,000 pre due date SMS sent (2018–19).

    Early action

    2,400,000 reminder letters sent (2018–19).

    Firmer action

    18,600 garnishees issued (0.4% of debt cases) (2018–19).

    Stronger action

    1,600 bankruptcies and company wind ups.

    (0.04% of debt cases) (2018–19).

    Further information

    In 2018–19 over $540 billion in liabilities were due, with 89.9% paid on time and 96.0% paid within 90 days after the due date.

    At 30 June 2019, the amount of collectable debt was $26.5 billion (this includes $16.5 billion from small business).

    See also:

      Last modified: 03 Jun 2020QC 57906