Can't pay your ATO tax debt? Here are your options

Why acting early matters

The ATO has become far more active in chasing business tax debts. Left alone, an ATO debt can grow with interest, and the ATO has strong powers — from disclosing business tax debts to credit reporting bodies, through to director penalty notices that make directors personally liable. Getting on the front foot changes your options dramatically.

ATO payment plans

For many businesses, the ATO will agree to a payment plan that spreads the debt over time. Smaller debts can sometimes be arranged directly. Larger or more complex debts usually need a properly prepared proposal that shows the ATO the business can sustain the arrangement — that's where getting it right the first time matters.

Interest and penalties

ATO debts often include the general interest charge (GIC) and penalties on top of the primary tax. In the right circumstances the ATO will consider remitting some interest or penalties — but you generally need a sound reason and a well-made case. (Note: the deductibility of GIC changed from 1 July 2025, which affects the cost of carrying ATO debt.)

Director penalty notices and personal risk

If your business hasn't met certain obligations — particularly PAYG withholding and super — directors can become personally liable through a director penalty notice. If you've received one, or think you might, this is time-critical and you should get specialist advice quickly. We can help you understand where you stand and, where needed, refer you to the right professional.