Show download pdf controls
  • What to do when your client has a tax debt

    Most taxpayers pay amounts they owe on time or shortly after the due date.

    If taxpayers don't engage with us to manage their debt, we may take action to recover the debt.

    How we treat your client when they have a debt depends on your client's:

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

    As a result, two people may appear to have 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:

    See also:

    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 can't pay in full or by the due date and they engage with us, we will work with them to manage the amounts they owe.

    Early action

    If your client doesn't pay on time, we may reach out to them to remind them of their obligations. This may be by SMS, letter or phone call.

    How we initially contact your client about their debt will vary based on their individual circumstances, previous behaviour and the contact information we have. If your client receives a reminder from us of their overdue tax bill, it's important they engage with us as soon as possible to manage it.

    Firmer action

    A small number of taxpayers don’t engage with us to address their debts. 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 an agreed payment plan.

    Disclosure of business tax debts

    If your client has overdue tax debts and meets certain criteria their tax debt may be reported to registered credit reporting bureaus (CRBs).

    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

    Contacting us early is the key to tackling debt, so talk to us so your client's debt position does not escalate.

    Check that your, 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.

    You can use our Online services for agents to view, set up, adjust or cancel 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: 06 Jul 2021QC 57907