- In Brief
- Posts
- In Brief: In August
In Brief: In August
What you need to know on tax debt this month

FOREWORD
Five years ago, if you owed the ATO, you could pick up the phone and explain your case. Someone on the other end would listen. They understood that cash flow isn’t linear, and that strong businesses sometimes stumble.
That way of doing things is gone.
Outcomes are harsher, timelines are shorter, and recovery is being driven by systems, not people. Debt has ballooned past $50B, director risk is climbing, and the ATO’s 2025–26 plan makes its priority clear: collect, collect, collect.
And while the remedy largely remains the same — a payment plan — it’s no longer just about having one; it’s about having the right one. Defaults now carry heavier consequences as the ATO doubles down on recovery and flags historical issues. That’s why it has to be right the first time.
QUOTE OF THE MONTH
“The rules changed. Not everyone noticed. Now even the best advisors struggle — it’s become specialist work dealing with tax debt and the ATO.”
— Michael Moon, Tax Assure
INSIGHTS
The ATO’s Shift: From Conversation to Automation
Tax debt has nearly doubled — climbing from $26.5B in 2019 to $52.8B by mid-2024, according to ATO data. At the same time, automation is reshaping enforcement. Director Penalty Notices surged 50% in a single year, worth $4.4B (ATO Annual Report 2023-24).
This isn’t about conversations anymore — it’s about systems. Recovery is triggered automatically. And silence from the ATO? That’s not safety. It’s usually the sign enforcement has already begun.
The reality is this is catching businesses of every kind — old, new, established, viable, and everything in between.
Olga Koskie, Director at Tax Assure, recently sat down with Paul Farmer, founder of Mentoris Group, to talk tax debt and the state of business in Australia in 2025.
Together, they unpack the many reasons business owners can slip into trouble with the ATO — from illness and legacy COVID debts to client changes, money management challenges, technological shifts, and broader market forces.
“Running a business is a different beast to doing the work. Plumbers, accountants, lawyers — technically they’re excellent, but the business side is where things unravel.”
TRENDS TO WATCH
The Tax Office’s Priorities For The Year Ahead

The ATO’s new Corporate Plan comes in at 96 pages. But the key message is clear as day: debt collection is priority #1.
Their full list of focus areas for the year ahead:
Debt collection & payment compliance — faster, tougher, automated
Fraud & system integrity — AI-driven detection & prevention
Payday Super — superannuation paid with wages (from July 2026)
Digitisation for small business — simpler reporting, faster systems
Future-proofing capability — technology, data, workforce
Why it matters:
Payment terms will tighten further
More plans will default under automation
Early engagement, with the right plan, is what every business needs to stay in control
THE CLOSING WINDOW OF OPPORTUNITY
ATO Recovery Is Now Automated — and Faster
The signs are easy to miss — but once they show, things move quickly:
Miss one instalment → recovery triggers
Remission rejected → escalation follows
Debt over $100K → flagged to credit agencies, with wider consequences
Once these patterns start, the ATO stops negotiating. The window closes, and options disappear.
That’s why the right plan isn’t about buying time — it’s about buying space for the business to recover. Act early and you set the terms. Wait, and the ATO’s systems will.
▶️ Watch: What a successful payment plan looks like »
Advisor takeaway: Don’t wait for the signs. If you see stress building, escalate early — that’s when we can still shape the outcome.
FIXING IT
What Early-Stage Advisors Can Do Now
Proactive engagement beats reactive recovery. Here are four steps you can take today:
Ask about retentions and cash flow timing gaps
Set up weekly GST visibility snapshots (not just monthly reports)
Track hourly profitability on labour (not just gross margin)
Escalate to a tax debt specialist before pursuing a restructure, not after
SBRs: SOLUTION OR TRAP?
Why Many Small Business Restructures Are Failing
Small Business Restructures (SBRs) can help, but only under the right conditions.
✅ Work if: Lodgements are current, director hasn’t used an SBR in 7 years, cash flow can support restructure.
❌ Fail if: DPN expired, forecasts are unrealistic, or compliance history is weak.
The reality is that many businesses rush into SBRs without meeting these conditions, which leads to failure and lost time. In those cases, a well-structured payment plan may achieve a better outcome.
▶️ Watch: SBRs and how they work in practice »
Advisor takeaway: SBR or payment plan? The key isn’t speed — it’s fit. Measure twice, cut once.
ACTION LIST
What To Review This Month

Six things to look at this month
Six things advisors should review now:
Review all existing payment plans — are they sustainable?
Flag aged ATO debt — it’s riskier than new debt.
Confirm ASIC/ATO contact details — outdated info = missed warnings.
Push for remission — penalties aren’t fixed in stone.
Don’t ignore silence from the ATO — it often means automation has started.
Bring in specialists early, before options close.
ADVISOR INSIGHTS
Visibility First. Strategy Second.
Most of the time, it’s not a tax debt problem, it’s a visibility problem. Clients get caught by blind spots: retentions they can’t touch, margins that don’t stack up, or cash flow that’s always backloaded.
These aren’t surprises if you’re looking at the numbers live. Real advisory doesn’t start with end-of-month reports — it starts with visibility, every week.
FINAL THOUGHT
The ATO’s focus is no longer hidden — it’s compliance and collections, front and centre.
And silence or delay isn’t safety; it’s risk.
Good businesses can still achieve good outcomes, but only if they move early, stay compliant, and secure the right plan before enforcement begins.
The window is narrower than ever. The right action, at the right time, makes all the difference.
📞 Connect with Tax Assure: We’re here to guide you and your clients through the most complex tax debt scenarios. Book a consultation »
IN CASE YOU MISSED IT
▶️ Why tax debt has become a fact of life for so many businesses »
▶️ The difference between good and bad ATO payment plans »
▶️ Do SBRs reset the clock for businesses with ATO debt? »
THAT’S IT FOR THIS EDITION
Got feedback? We’d love to know what landed—or what missed. Just hit reply and share your thoughts!
Disclaimer: The information provided is for general purposes only and should not be considered as specific financial, tax, or legal advice. We recommend consulting with a qualified tax professional or advisor to discuss your specific circumstances before making any decisions or engaging with the Tax Assure team directly.