ATO 'Debts on Hold' Are Now Showing in Account Balances

General information only. This is not tax or financial advice. Consult a registered tax agent for advice specific to your situation.

From August 2025, the ATO began progressively including “debts on hold” in account balances visible through myGov and the ATO’s online services. For many individuals and businesses, this means a balance that previously showed zero — or a credit — may now display a significant debt. Here is what changed, what it means for you, and what to do next.

What Is a “Debt on Hold”?

A debt on hold is a tax liability that the ATO has formally assessed but placed in a paused collection state. Common reasons debts are placed on hold include:

• The taxpayer is experiencing financial difficulty or hardship
• The debt is subject to an objection, review, or appeal
• The ATO has determined collection would be uneconomical (often for smaller debts where collection costs would exceed recovery)
• The debt relates to a dissolved company or deceased estate where recovery is not currently pursued

Being “on hold” does not mean the debt has been waived, remitted, or written off. It means the ATO has paused active collection — but the debt remains on the books.

What Changed in August 2025

Prior to August 2025, debts on hold were not displayed in the main account balance shown in the ATO’s online services or myGov. Taxpayers could have significant historic debts and see a zero or credit balance in their ATO account. This created two problems:

1. Taxpayers were unaware of the debt’s existence or had forgotten about it
2. Refunds could be offset against on-hold debts without warning, surprising taxpayers expecting a refund

From August 2025, the ATO is progressively including these debts in the displayed account balance. The rollout is staged, with some older debts (particularly pre-2017 debts under separate legislation) not yet included in the on-hold balance display.

The GIC Continues to Accrue

One of the most important practical points: even while a debt is on hold and not being actively collected, General Interest Charge (GIC) continues to accrue. The GIC rate for 2025–26 is approximately 10.65% per annum, compounding daily.

A debt that has been on hold for several years may have accrued substantial interest on top of the original principal. When the ATO re-activates the debt for collection — or when it becomes visible in your balance — the total figure including accrued GIC may be significantly higher than the original assessment.

When a debt is first brought back into the visible balance from on-hold status, the ATO applies a temporary remission of GIC for six months before standard interest rules resume. This gives taxpayers a brief window to address the debt at a lower cost.

Credit Reporting for Large Debts

From 2025, the ATO began reporting certain business tax debts to credit reporting bureaus. Debts exceeding $100,000 that are not subject to an active payment plan or formal dispute may be reported. This can affect:

• Business loan applications
• Commercial lease applications
• Trade credit terms
• In some cases, personal credit where the individual is personally liable for a business debt

The ATO is required to notify taxpayers before reporting their debt to a credit bureau, giving them an opportunity to pay, enter a payment plan, or dispute the debt.

For individuals, the credit reporting threshold is generally higher and the ATO’s current approach focuses on business debts — but this may evolve.

How to Check Your ATO Balance

Your current ATO account balance, including any debts on hold that have been made visible, is accessible via:

1. Log in to myGov (my.gov.au)
2. Link to the ATO service (if not already linked)
3. Navigate to Tax > Accounts
4. Review the balance and any outstanding amounts

You can also see a breakdown of what makes up the balance, including whether items relate to income tax, GST, PAYG, penalties, or interest charges.

If you see an unexpected balance and are unsure what it relates to, you can request a full account statement from the ATO, or contact them on 13 28 61 (individuals) or 13 11 42 (businesses).

Payment Plan Options

If you have a debt on hold that is now visible and you want to resolve it, the ATO offers several options:

For smaller amounts (generally under $100,000):

• Self-service payment plans can be set up directly through myGov or the ATO’s online services without needing to call
• These plans may be interest-free if the debt is below certain thresholds and the plan meets ATO criteria

For larger amounts:

• Contact the ATO directly to negotiate a payment arrangement
• Larger debts typically accrue GIC during the plan period
• Having a tax agent negotiate on your behalf can result in better outcomes for complex situations

Voluntary full payment:

• If you can pay the full amount, do so to stop GIC accrual immediately
• Even partial payment reduces the GIC base going forward

Financial Hardship Provisions

If you are in genuine financial difficulty and cannot pay the debt — even over time — the ATO has hardship provisions available under the Tax Administration Act. These can include:

• Release from the debt in extreme cases (full or partial)
• Deferral of collection
• Remission of GIC or penalties in recognition of the hardship circumstances

Hardship provisions are not freely available — they require demonstration of serious financial difficulty, and the ATO will assess your overall financial position. A tax agent or financial counsellor can assist with applications.

What to Do Now

If you log in to myGov and see an unexpected balance:

1. Do not ignore it — even if the debt is on hold, GIC is accruing and the balance will grow
2. Identify what the debt relates to — review the account breakdown or request a statement
3. Check if it is accurate — if you believe the debt was previously disputed, assessed incorrectly, or already paid, contact the ATO or your tax agent before it starts accruing additional charges
4. Consider your options — payment in full, a payment plan, or a hardship application depending on your circumstances
5. Act within the six-month GIC remission window — if the debt has recently moved from on-hold to visible, the temporary GIC remission period provides a lower-cost window to resolve it

Sources

• ATO Tax Professionals Newsroom: We’re including debts on hold in account balances
• ATO guidance: Debts on hold
• ATO credit reporting for business tax debts
• ATO payment plans