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  • What to do when your client has a tax debt

    Most taxpayers pay amounts they owe on time or shortly after the due date. For the minority of payments that remain outstanding, we take action to recover the debt.

    How we treat your client when they have a debt is not a linear process. It takes into consideration your client's:

    • individual circumstances
    • past behaviour
    • lodgment and payment history.

    As a result, two people may have what looks like similar debt circumstances, but we may treat them differently. Not every taxpayer will go through each step of our treatment or approach to debt recovery.

    Our approach includes:

    Prevention

    We make it as easy as possible for your clients to pay their tax on time, and prevent them from finding themselves with a tax debt.

    We may send your clients SMS reminders before payment due dates, and provide convenient online help tools, payment channels and self-serve payment options.

    If your client responds to our payment reminders by making a payment or by getting in touch, we will consider this in future interactions.

    Early action

    If your client does not pay on time, we may take early action including:

    • sending a post-due date SMS
    • issuing a reminder letter
    • telephoning your client
    • referring the debt case to an external debt collection agency.

    How we initially contact your client about their debt will vary based on their individual circumstances and previous behaviour. For example, your client may not have responded to our SMS reminders in the past, but took action after an external debt collection agency referral. In future, our early action for this client may start with a referral to an external debt collection agency.

    Firmer action

    Only the minority of taxpayers don’t communicate with us to address their debt. In these cases we will take firmer action to prevent unfair financial advantage over those who pay on time.

    We may issue a garnishee or director penalty notice if your client fails to:

    • communicate with us
    • work with us to pay their tax debt
    • comply with agreed payment plans.

    We will not take firmer action if your client is complying with a mutually agreed payment plan.

    See also:

    Stronger action

    We work to support viable businesses by providing a level playing field for those who are doing the right thing. If firmer action to recover your client's debt is unsuccessful, we may take stronger action.

    Stronger action is usually legal means including:

    • notice of intended legal action
    • summons
    • statutory demand
    • judgment
    • bankruptcy notice
    • creditor's petition
    • application for winding up
    • insolvency proof of debt.

    We will not take stronger action if your client is complying with a mutually agreed payment plan.

    See also:

    Support for your clients

    We want to work with you regardless of your client's situation. Communication is the key to tackling debt, so talk to us early so your client's debt position does not escalate.

    Check you or your client's contact details are up to date so we can get in touch.

    Payment plans

    If your client is struggling to pay their tax, a payment plan may be the best option. We have online and automated phone payment services to help your client set up a payment plan and pay back their debt by instalments.

    When Online services for agents becomes available you will be able to see your client's debt and payment plan information. You can also choose to set up a payment plan for your client.

    See also:

    Hardship

    If your client is experiencing serious hardship we provide targeted support using a range of debt relief options, including release from payment in some cases.

    See also:

      Last modified: 22 Feb 2019QC 57907