Unpaid Tax and Super Debt

Unpaid Tax and Super

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If you owe tax which you can’t pay by the due date, it’s best to contact the ATO before the due date so they can help you while it’s still manageable. But if you’re in a position that you do owe an over due tax or super debt then it’s worth noting that the ATO is changing its approach to collecting unpaid tax and super, focusing on businesses who refuse to engage and continue to ignore its SMS and letter reminders.

As a company director you are responsible for ensuring that the company’s tax and super obligations are reported and paid on time. If your company does not pay certain liabilities by the due date, the ATO can recover these amounts from you personally as a current or former company director.

  • For businesses who do not engage with the ATO or set up a payment plan for unpaid GST, PAYG withholding or employee super, the ATO will move more quickly to firmer actions such as Director Penalty Notices (DPNs) and garnishees. A Director penalty notice (DPN) is a notice sent by the ATO to all Director’s of the entity/entities making them personally liable for the amounts due.
  • Directors of multiple companies who allow amounts of GST, PAYG withholding and employee super to go unpaid, and do not engage with the ATO, can expect the ATO to look at their debts more holistically. They can expect to receive DPNs capturing the total value of these amounts across all related entities. If they do not take action, the ATO can recover these amounts directly from them, putting their assets at risk.

As was the case before these updates, if you don’t pay a debt on time, they will automatically add a general interest charge (GIC) to what you owe. Your debt will grow each day your debt remains unpaid. Interest calculates on a daily compounding basis on the amount overdue and is added to your account periodically. Note: GIC will not be tax deductible from the 1st of July 2025.

Find out more about what happens if you don’t pay. Don’t hesitate to get in contact us at STS Accounting if you have any concerns, questions or about your tax situation.