ATO Increasing Debt Recoveries in 2023-24 Corporate Plan

Tadhg Schultz, Accountant

The ATO have recently released their 2023-24 Corporate Plan (Plan), which sets out several strategic objectives for the regulator over the next 4 years. Of particular note, for insolvency and accounting industries, there is a strong focus on debt recovery with a view to collect over $45 billion dollars, two thirds of which are owed by SMEs.

In contrast to the approach adopted by the ATO in previous years, they have made it clear that DPNs are no longer a last or even second resort. Opting instead to omit warning letters and issue Penalty notices in the immediate event of payment plan defaults. In particular, the Plan states that Superannuation Guarantee compliance will be monitored more closely and enforced with firmer action in the event of failure.

The Plan also warns of an increase in credit agency disclosure notices being issued, a more recent tool reserved for businesses owing over $100,000 who refuse to enter into payment arrangements. In a recent statement, the Tax Office have advised that they expect to issue over 50,000 intent to disclose notices, which may subsequently lead to more than 2,500 businesses having their tax debts disclosed to registered credit bureaus.

Whilst we expect that these actions will inevitably lead to an increase in both corporate and personal insolvencies, the ATO have advised that as always, the best way for directors to avoid personal liability or debt disclosure is to engage with them early. If you or your clients have entered into payment arrangements or are behind on their reporting obligations, please ensure they take action now to avoid repercussions.

The above constitutes some brief points only of the Plan and does not constitute legal or financial advice. You can read the full Plan for yourself on the ATO’s website, if you have any questions in relation to the Plan or the points we have noted above please contact your local Hamilton Murphy office or email info@hamiltonmurphy.com.au