Quick Facts
- Smallest growth in collectable debt achieved since pre-pandemic
- 84,529 director penalty notices (DPNs) issued
- Small business account for majority of collectable debt, at $35.9 million
- 1,005,994 ABNs cancelled
- 90% of directors now have a director ID
ATO’s firmer posture towards debt repayment
The ATO continued to enforce consequences for deliberate non-compliance. The active use of enforcement powers to recover unpaid tax – such as statutory demands for payment, wind up processes, director penalty notices and garnishee notices – led to the ‘smallest growth in debt since before the pandemic’.
2024-25 Overall ATO debt collection
The ATO reports that for 2024-25 the smallest growth in collectable debt was achieved since before the pandemic. 89.4% of payments were made on time and in full, exceeding their target of 88%. Over 95% were paid within 90 days.
Small businesses continue to account for most of the collectable debt value, at $35.9 billion and ‘remain a key focus of payment strategies’.
The ATO payment strategy has ‘reset the compliance posture through firmer and faster actions, particularly for taxpayers who do not engage on priority debts like super guarantee charge (SGC), PAYG withholding and GST’.
In 2024-25, the ATO expanded this approach to taxpayers with repeated audit action for SGC and PAYG withholding.
2024-25 Director penalty notices
In 2024-25 the ATO issued 84,529 director penalty notices to individual directors in respect of liabilities of $5.5 billion. At 30 June 2025, $1.2 billion of these liabilities had been collected.
Director ID numbers grow to 90%
It is vital to know the names and details of company directors before approving trade credit. Previously, director information could be hidden or difficult to obtain. The government’s Director ID program means that the person has successfully verified their identity, improving both data integrity and traceability of directors’ relationships with companies over time. These IDs also help prevent fraudulent directors and illegal phoenix activity. The ATO states they continue to drive adoption of director IDs, resulting in 234,650 being issued in 2024-25. The ATO estimates that 90% of directors now have one.
Access Intell uses director IDs to display ownership details of an entity and cross-directorship details. The rising compliance gives further confidence that director information is accurate and reliable.
One million ABNs cancelled in 2024-25
The ATO conducts regular checks to ensure information on the Australian Business Register (ABR) is current and accurate. Removing non-entitled ABNs from the ABR has resulted in 1,005,994 being cancelled in 2024-25.
Ensuring your customers have a valid ABN is vital for continuing trade. Our platforms sync with the ABR to verify and then continually monitor the status of your customer’s ABNs to ensure they remain active.
Key Takeaways
We expect to see continued high numbers of director penalty notices, disclosed business tax debts and other actions in 2025-26. Factors include the ATO’s continued focus on non-compliance, plus their stated system improvements and strengthened data-matching approach.
Disclosed business tax debts are a key red flag alert for credit managers. The ATO discloses this data to approved credit reporting bureaus, including Access Intell. Clients that use our online trade application and assessment and credit risk monitoring products have instant access to this vital information both within the platform and via email alerts. Using this data proactively can mean the difference between suffering a large bad debt and protecting your business.
Source:
Australian Taxation Office Commissioner of Taxation Annual Report 2024-25
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