The ATO has flagged a return to more aggressive debt collection actions after seeing a trend of profitable businesses that have the capacity to pay their tax debts but are actively choosing not to do so.
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The ATO should not be considered as an unsecured lender last in line, because when they lose patience, they hit hard.
Taxed debts include not only income tax, but also unremitted GST and unpaid PAYG withholding, as well as super guarantee charges.
In general, if taxpayers do not pay their tax by the due date or engage with the ATO by the due date to work out a payment plan, general interest charge (GIC) will be applied to any unpaid amounts. GIC is automatically calculated on a daily compounding basis on the amount outstanding and added to taxpayers’ accounts periodically.