ATO debt help for company directors

If your company owes the ATO, you can pay in full, ask for a payment plan, restructure, or wind up. Acting before the ATO issues a director penalty notice keeps the most options open.

If your company owes the ATO, the options narrow the longer it is left. Our registered liquidators help small and medium business directors understand where they stand, what the ATO can do next, and which option fits: a payment plan, a restructure, or an orderly wind-up. We work in English, Mandarin, Cantonese and Korean.

What the ATO can do when tax debt is unpaid

• Director penalty notices (DPNs). Directors can become personally liable for unpaid PAYG withholding, GST and super guarantee charge. Read our DPN guide.
• Garnishee notices. The ATO can collect directly from money owed to your company, including bank accounts.
• Credit reporting. The ATO may report a business tax debt to credit reporting bureaus if at least $100,000 is more than 90 days overdue and the business is not engaging with it. It must give 28 days’ written notice first.
• Estimates. If returns are not lodged, the ATO can estimate what is owed, and director penalties can attach to those estimates.

Your options

ATO payment plans

Many businesses can set up a payment plan by contacting the ATO for smaller debts; larger debts need to be negotiated with the ATO. The ATO will usually want to see that lodgements are up to date and that the plan is realistic. Interest keeps accruing on the unpaid balance, and missing an instalment can bring back firmer action. A payment plan does not remit a director penalty that has already been issued.

ATO garnishee notices

A garnishee notice directs a bank or a customer who owes your company money to pay it to the ATO instead. It can arrive with little warning and can stop the business paying wages and suppliers. If you receive one, get advice straight away: options include negotiating with the ATO or, where the business cannot recover, a formal appointment.

Why act early

• Late lodgement removes options. If BAS or super returns are more than three months overdue from the due date, a DPN can only be cleared by paying the debt in full.
• General interest charge is no longer tax-deductible from 1 July 2025, so carrying ATO debt costs more than it used to.
• From 1 July 2026, super must be paid closer to payday, which reduces the buffer many businesses relied on.

How we help

1. Confidential first conversation in your language. We review ATO statements, lodgement status and any notices.
2. Options in writing. What each path means for the company and for you personally.
3. Act within the deadlines. If an appointment is the right step, we can act as administrator, restructuring practitioner or liquidator.

Common questions

Can the ATO forgive a company’s tax debt? Rarely. The ATO may remit some interest and penalties, but it generally does not write off a company’s tax debt. A restructuring plan accepted by creditors, including the ATO, can reduce what the company pays.

Will the ATO report my business debt to credit agencies? It can, if at least $100,000 is more than 90 days overdue and the business is not engaging with the ATO. You get 28 days’ written notice first.

Should I talk to my accountant or a liquidator? Your accountant is the right first call for lodgements and payment plans. Speak to a registered liquidator when the debt is more than the business can pay from its cash flow, or when a DPN or garnishee notice has arrived.

Example: a Sydney family manufacturer owing about $2.5 million to the ATO was restructured through voluntary administration and a deed of company arrangement. Read the case study.

Speak confidentially with a registered liquidator

Sydney and Brisbane · English, 中文, 한국어

This page is general information, not advice about your situation.