From August 2025, the ATO will start including debts on hold for small trade businesses in taxpayer account balances.
At Trinity Advisory, we help trade-based, family-owned businesses grow with confidence. From August 2025, the ATO will start including debts on hold for small trade businesses in taxpayer account balances. This change could affect cash flow, financing, and forward planning. Here’s what it means for you, and how we can help you stay ahead.
What Are ATO “Debts on Hold”?
A “debt on hold” is an old tax debt the ATO chose not to pursue at the time, often because it wasn’t cost-effective. Until now, these debts didn’t appear in your ATO account balance. Instead, they were only offset if you were due a refund.
From August 2025, those debts will be visible in your account balance, meaning they can no longer be ignored.
What’s Changing in 2025?
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Debts $100 or more: You or your tax agent will get a letter before the debt is added.
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Debts under $100: No letter, but the amount will still appear in your account.
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Interest (GIC): No interest will apply for the first six months after the debt is added. After that, the General Interest Charge will start accruing.
Why ATO Debts on Hold Matter for Small Trade Businesses
For builders, electricians, mechanics, cabinet makers, and other tradies, cash flow is the lifeblood of the business. This change can create challenges such as:
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Unexpected hits to cash flow: Refunds you were counting on may disappear.
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Higher tax bills: Old debts can resurface alongside current obligations.
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Interest costs: After six months, the meter starts running with GIC.
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Financing complications: Lenders often check your ATO account. A hidden debt suddenly showing up could affect borrowing power.
How Trinity Advisory Helps You Get Ahead
At Trinity Advisory, our values are integrity, clarity, growth, and partnership. We go beyond compliance by partnering with you to turn challenges into opportunities. Here’s how we can help you manage ATO debts on hold:
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Early Detection and Review
We audit your ATO account balances now, so you spot issues before they cause stress. -
Cash Flow Modelling and Forecasting
We build forward-looking cash flow models to prepare for debts before they impact your business. -
Tailored Strategies for Tradies
Every trade business is unique. We create pricing, payment, and job strategies so you can absorb surprises without financial strain. -
Education and Empowerment
We explain what these changes mean in plain English and ensure you know exactly what steps to take. -
Ongoing Support and Accountability
With quarterly meetings, we keep you accountable and ensure you’re never blindsided by new ATO rules or unexpected costs.
What You Should Do Right Now
To protect your business:
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Contact Trinity Advisory if you receive an ATO letter or notice of a debt on hold.
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Include potential debts in cash flow forecasts so they don’t derail your plans.
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Stay proactive because in business, being prepared is always cheaper than reacting under pressure.
The Bottom Line
The inclusion of ATO debts on hold for small trade businesses isn’t about creating new debt—it’s about making old debt visible. For trade business owners already working with tight margins, this visibility can either create a cash flow crunch or be an opportunity to plan smarter.
At Trinity Advisory, we’re passionate about helping trade-based, family-owned businesses succeed. By staying proactive and strategic, you can turn this change into a chance to strengthen your business foundations.
Need help with ATO debts on hold?
Contact Trinity Advisory today to book a free strategy call. Let’s make sure your numbers work for you, not against you.
