Accountants Daily have reported an ATO announcement that ‘debts on hold’ will again be used to offset tax refunds or credits starting next month.

A non-pursued debt is a debt that has been placed on hold and is not visible on the balance of a taxpayer account.

When a debt is placed on hold, the ATO do not undertake any collection action, usually because it is not economical to do so. A debt deemed uneconomical for collection action will be re-raised at a later date, if a taxpayer becomes entitled to credits, which will be applied to reduce the balance.

A recent ATO update noted “From June 2022, we will recommence offsetting clients’ tax refunds or credits to pay off their debts-on-hold”.

This may potentially apply to companies anticipating refunds from R&D Tax Offsets for the YE 30 June 2022.

More information is available on the ATO website.