The taxman is hovering. It’s no secret the ATO is getting even more serious about collecting the estimated $30 billion owed by Australia’s small businesses. And while there’s currently an amnesty* in place for eligible small businesses to get tax lodgements up to date, relief from penalties won’t help a company that’s struggling to pay accrued legacy debt. For many, it might be time to explore other options.

The latest credit risk insights by Alares shows that during June there continued to be a major uptick in ATO Court activity, which is now well above historical monthly totals. The ATO Court enforcement activity has increased 10-fold on last year’s activity and is tracking at 20% above 2019 (pre-pandemic) activity levels.

Company winding-ups and personal bankruptcy petitions also showed continued month-on-month increases. In fact, winding-up applications in June remained well above the trend line for the past two years. And the ATO accounts for a significant portion of the increase in winding up applications having brought “shut down” proceedings against more companies in the last three months, than it had in total during the preceding 39 months.

Insolvencies in June remained above pre-COVID levels, continuing the trend for 2023. And going into the new financial year, ATO Court activity and winding-up applications will likely continue this trend.

Insolvencies are on the rise because of myriad economic and geopolitical pressures. But with the ATO continuing to ramp up its enforcement activities, there’s no longer a place to hide for those companies that are struggling to keep up with mounting liabilities.

If you track the timeline of the ATO’s debt recovery since the pandemic was declared, it’s very telling:

  • March 2020: winding-up applications plunged to their lowest level since 2014.
  • Early 2022: ATO takes off its ‘velvet gloves’.
  • May 2022: ATO reports it’s on a “firmer footing” for compliance activities, with reports of 30-40 Director Penalty Notices (DPNs) being issued a day. This quickly jumped to around 120 a day as insolvencies hit pre-pandemic levels.
  • July 2022: ATO starts issuing garnishee notices.
  • June 2023: major uptick in ATO Court activity, with winding up applications surging.

The Small Business Restructuring (SBR) process could be one such solution

Are you or a client in financial distress and unable to pay a tax bill? Have you received a DPN? It’s important to act now. Ignore the taxman at your peril. Speak with a registered insolvency/business turnaround specialist to determine the best course of action.

The Small Business Restructuring (SBR) process could be one such solution. We’ve seen a big increase in the number of small businesses taking advantage of SBRs to get their businesses back on track and clear legacy debt (particularly tax debt). The ATO has even given SBRs an unofficial ‘tick of approval’. And from the many SBRs we’ve handled it’s certainly been a great solution for eligible business across myriad industries.

There could be other solutions, too, so the sooner you act, the more options there might be. Jirsch Sutherland has 17 registered practitioners and their teams across the country ready to help. Contact us asap on 1300 547 724 or email for an obligation-free consultation.

Key SBR benefits:

  • Easier to get clients to engage earlier with qualified insolvency professionals
  • Directors feel empowered throughout the process by retaining control of the business’s day to day operations
  • ATO supportive of the process
  • <80% of legacy debt being compromised
  • Significant cash flow improvement for the business
  • Quick, simple, unintrusive process
  • No disruption to key relationships – e.g., staff and landlord
  • Enables directors to get back on an even keel and to even grow their businesses

ATO Debt Recovery Activity

*The amnesty is for small businesses with a turnover of less than $10 million that have failed to lodge income tax returns, fringe benefits tax returns or business activity statements. It applies to tax obligations that were originally due between 1 December 2019 and 28 February 2022, and it runs from 1 June 2023 to 31 December 2023.

Our personal insolvency experts assist individuals that owe money, are in financial distress and dealing with creditors

Personal insolvency occurs when you, as an individual, are unable to pay your debts. As each individual situation is different, so are our solutions, which include bankruptcy and personal insolvency agreements.

Our Bankruptcy Trustees pride themselves on doing everything possible to help clients find a way to solve their financial problems and to protect them from the emotional trauma of dealing with creditors – and set them up for a better recovery. 

Our specialist experience and sensitive approach can help determine the best, most practical solution for individuals concerned with personal insolvency issues. Take the first most important step by seeking our assistance today.

Our personal insolveny experts help you deal with creditors and resolve your debts. Act early to improve your chances of a positive outcomeEnquire to book your free consultation

More about the small business restructuring process & eligibility

Our passion is negotiating with creditors and helping individuals gain freedom from their debts

Since 1984, we have built our business on empathy and integrity – qualities that have led to us being recognised as one of Australia’s leading national insolvency players and trusted for over 30 years



A leading Australian insolvency, restructuring and business recovery firm. We are experts in both corporate and personal insolvency.



Our qualified practitioners in Australia and in over 30 overseas associate offices offer domestic, international and cross-border insolvency expertise.



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