When debt on hold came about
The Australian Taxation Office (ATO) has had the concept of Debt on Hold for many years, but from 1 August 2025, the ATO announced it would begin including these debts in account balances.
Many taxpayers weren’t aware of their “on hold” debts because they weren’t shown in their online balances, which created confusion when the ATO later offset refunds or credits against them. By bringing all debts into view, taxpayers now have a complete picture of what they owe, even if the ATO is not actively pursuing recovery of the debt. This decision does not include debts placed on or before 1 January 2017 or debts under $100.
What is debt on hold?
Debt on Hold is not a waiver or write-off. It simply means the ATO has decided not to actively pursue collection of the debt at this time. The debt remains recorded against your tax file number (TFN) or Australian business number (ABN), and may still:
- Accrue interest in some cases
- Be offset against future refunds or credits
- Be reactivated if your circumstances change
What does it mean for you?
If you have a Debt on Hold, here’s what it means:
- Transparency: From 1 August 2025, you’ll now see the debt included in your ATO Online account or through your tax agent. This allows you to plan better.
- Refunds may be taken: If you’re entitled to a tax refund or credit, it can be automatically applied against your Debt on Hold.
- Future reviews: The ATO can decide to re-engage recovery if your financial situation improves.
What you can do
If you have or suspect you have a Debt on Hold, here are some steps to consider:
- Check your account – Log in to ATO Online or speak with your tax agent to see if any “on hold” debts are showing.
- Understand your position – Know how much is owing, and whether it could affect future refunds.
- Communicate with the ATO – Being proactive always helps. You may be able to negotiate a payment plan or apply for interest remission.
- Plan ahead – Even though it’s on hold, think about how you might manage repayment if the debt is reactivated.
- Seek advice – An experienced accountant can help you review options like payment plans, compromise of debt, or restructuring.
How Colledges can help
At Colledges, we know how unsettling it can be to see an old debt reappear or to suddenly realise that a refund has been offset. That’s why we’re here to guide you.
Here’s how we help with Debt on Hold:
- Clarity: We’ll review your ATO account to confirm what debts are on hold and explain what they mean for you in plain language.
- Options: We’ll assess whether a payment plan, hardship application, or remission request is best suited to your situation.
- ATO negotiations: We can communicate with the ATO on your behalf, ensuring the right information is presented and your rights are protected.
- Future planning: We’ll help you build a financial structure that reduces the risk of tax debts building up again.
We’re here to help. We’re not just accountants, we’re your partners in navigating complex tax matters with confidence, peace of mind and less stress. If you have questions about Debt on Hold or need support, please give us a call on (03) 9851 6500 or email hello@colledges.com.au.
