ATO Crackdowns in 2025: What Small Business Directors Need to Know
- Teresa Debevec
- Sep 30
- 3 min read
Updated: Sep 30
The ATO has ramped up its debt collection efforts in 2025, and small businesses are feeling the pressure. After years of leniency during the COVID-19 pandemic, the grace period is over. If you have unpaid tax or super, it’s more important than ever to get on top of your obligations.
ATO Crackdown 2025: Small Business Directors Under Pressure
The ATO Crackdown 2025 poses a challenge unlike anything small business directors have faced.
In recent years. With more aggressive enforcement, directors can now be personally liable for unpaid company tax obligations. Acting quickly, staying compliant, and forecasting cash flow are essential steps to avoid falling into financial and personal risk.
What’s Changing: A More Aggressive ATO
Surge in Director Penalty Notices (DPNs)
Directors face greater exposure in 2025. According to the ATO’s Deputy Commissioner Anna Longley’s speech to The Tax Institute Tax Summit, the ATO has substantially increased the issuance of Director Penalty Notices (DPNs). These hold directors personally accountable for unpaid company taxes, including PAYG withholding, superannuation guarantee charge (SGC), and GST.
The ATO’s Enforcement Arsenal: Not Just DPNs
Garnishee Notices
The ATO can direct banks, debtors, or merchant providers to send money straight to the ATO. This can apply to one-off payments or ongoing deductions until a debt is cleared.
Debt disclosure
If your business has an overdue tax debt exceeding $100,000 that is more than 90 days overdue and you’re not engaging with the ATO, your debt might be reported to a credit reporting bureau (CRB).
“Firmer Action” Approach
The ATO is accelerating its efforts to escalate actions against businesses that don’t engage early, using winding-up notices, DPNs, and garnishees across related entities. In the 2024–2025 financial year alone, the ATO issued 84,000 DPNs, 24,000 debts were reported to CRBs, and over 15,000 garnishee notices were issued.
Why This Matters to Small Businesses
For small business owners, the risks are high. The ATO can now hold directors personally responsible for unpaid PAYG, GST, and SGC. After a DPN is issued, you may have only 21 days to respond, a very narrow window for action.
Additionally, garnishee notices can arrive unexpectedly, quickly draining company bank accounts or redirecting debtor payments straight to the ATO. This can cause immediate cash flow shocks. Furthermore, if your tax debt is reported to credit agencies, it can severely impact your business’s reputation and borrowing capacity.
What You Can Do
Lodge BAS and returns on time, even if you can’t pay in full.
Keep payroll and super up to date; these are top ATO priorities.
Engage early with the ATO to negotiate payment plans.
Keep your ASIC registered address current to ensure you receive notices.
Forecast cash flow to prepare for “what if” scenarios.
Seek professional help early, before notices arrive.
Work with experts, staying on top of deadlines, cash flow, and compliance takes time and the right systems.
Final Word
The ATO is back in enforcement mode in 2025. Ignoring notices or delaying action can put your business and your personal assets at risk. Proactive management with the right systems and expertise keeps you out of the ATO spotlight.
Partnering with us means you’ll always be one step ahead, with clear financials and no nasty surprises.
👉 Let’s talk today about keeping your business compliant and future-proof.
