🌿 ATO Debts on Hold: What’s Changing from August 2025 (and Why It Matters)

From August 2025, the Australian Taxation Office (ATO) introduced a major update that will affect how your account balances are displayed—specifically, how “debts on hold” are treated. This change is designed to bring greater transparency to your tax obligations, and I want to make sure you feel informed, prepared, and empowered.

Let’s walk through what’s shifting, what it means for your business, and how we can navigate it together.

🌱 What Is a Debt on Hold?

A “debt on hold” is a tax debt the ATO has paused collecting—often due to financial hardship or because pursuing it isn’t cost-effective at the time. While it’s on hold, you won’t receive letters or calls about it, and no interest is charged. However, any future credits or refunds will be automatically applied to reduce the debt.

The catch? These debts haven’t been visible in your account balance—until now.

🌿 What’s Changed in August 2025?

Starting August, the ATO began displaying debts on hold directly in your account balance. This means:

• You’ll see a clearer picture of your total tax liabilities.

• Your BAS Agent (that’s me!) will also have access to this information to help you plan and respond.

• Debts placed on hold before 1 January 2017 won’t be included just yet, as they’re still under legal review.

Each debt will be listed with details: the type of tax it relates to, and the time period it covers. No more hidden figures—just clarity. Still painful but more clear.

🍃 Key Things to Know

• Debts Over $100: You’ll receive a letter before these are added to your account.

• Debts Under $100: These will be added automatically, without notice. You might see a small bump in your balance.

• If You’re on a Payment Plan: The ATO will consult with me before adding any on-hold debts, so your current arrangements are respected.

🌸 Interest-Free Grace Period

Once a debt on hold is added to your account, the ATO will continue to waive interest for six months. After that, interest may begin to accrue—so it’s wise to act early.

Even small payments during the grace period can reduce future interest. For example, paying $50 on a $250 debt now means less interest later. You can pay off part or all of the debt anytime.

🌼 Why This Matters

This update gives us a fuller, more honest view of your tax position. With all debts visible, we can:

• Plan payments more strategically

• Avoid surprise interest charges

• Make informed decisions about budgeting and cash flow

It also means I can offer more tailored advice—whether it’s offset strategies, payment plans, or simply helping you understand what’s changed.

🌻 Final Thoughts

Transparency is a gift. By revealing debts on hold, the ATO is giving us a clearer canvas to work with. As your BAS Agent, I’m here to help you interpret the details, plan ahead, and stay confident in your financial journey.