As we noted in several editions of our newsletter, the ATO accelerated debt collection in 2022, issuing a total of 18,500 director penalty notices. This was revealed earlier this month amid a new tactic of disclosing tax debt information to credit referral agencies for businesses with debt over $100,000.

The ATO sent 52,000 warning letters to directors of 30,000 companies in April, yet one in three failed to take action. By August, 7,000 director penalty notices had been issued. For the last five months of 2022, the ATO sent 29,000 warning letters and referred around 20 businesses daily to credit agencies.

The value of debt owed by business at the start of the campaigns was $17.3 billion. As a result of these two campaigns, over $714 million has already been paid in full and a further $5.4 billion is now actively managed under payment arrangements.

The result of the ATO’s campaign also showed up in final insolvency figures for 2022. These figures revealed a 51% increase from the corresponding period.

The issuing of director penalty notices and disclosure of business tax debt information to credit reporting agencies is a strong reminder to businesses and individuals of the importance of paying tax debts.