ATO to Include Tax 'Debts on Hold' in Taxpayer Account Balances

From August 2025, the ATO is progressively including 'debts on hold' in relevant taxpayer ATO account balances.

A 'debt on hold' is an outstanding tax debt where the ATO has previously paused debt collection actions.  Tax debts will generally be placed on hold where the ATO decides it is not cost effective to collect the debt at the time. 

The ATO is currently required by law to offset such 'debts on hold' against any refunds or credits the taxpayer is entitled to. The difficulty with these debts is that the ATO has not traditionally recorded them on taxpayer's ATO account balances.

Taxpayers with 'debts on hold' of $100 or more will receive (or their tax agent will receive) a letter before it is added to their ATO account balance (which can be viewed in the ATO's online services or the statement of account). 

Taxpayers with a 'debt on hold' of less than $100 will not receive a letter, but the debt will be included in their ATO account balance.

The ATO has advised it will remit the general interest charge ('GIC') that is applied to 'debts on hold' for periods where they have not been included in account balances.  This means that taxpayers have not been charged GIC for this period. 

The ATO will stop remitting GIC six months from the day the taxpayer's 'debt on hold' is included in their account balance.  After this, GIC will start to apply.

If you have any questions in relation to the matters discussed in this blog, please get in touch with us.