ATO Debts on Hold Will Again be Used to Offset Tax Refunds or Credits Starting June

May 23rd, 2022

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.

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