ARTICLE · 03 DECEMBER 2022

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The ATOs current debt recovery strategy

Worrells

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The ATO's collectable debt is expected to decline, as it converts to insolvency debt.

AustraliaInsolvency/Bankruptcy/Re-Structuring

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Will your clients be part of the insolvency debt book recovery?

During the COVID-19 pandemic, the Australian Taxation office (ATO) paused all collection activities. The ATO's decision intended to give businesses an opportunity to recover, following the hit suffered from lockdowns and the unprecedented lull in economic activity.

This pause in ATO debt recovery meant its total book debts sat at $66.6 billion at the close of the 2022 financial year. This is an increase of 13.27% on the 2021 financial year, and a 25.19% increase since the pandemics start. The increase in the value of the total debt holdings reflects the ongoing impacts on businesses' cash flow in the challenging post-pandemic economic environment. Conversely and due to the ATO's pause, its insolvency debt remained steady throughout the course of the pandemic.

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