When old tax debts re-appear: How SMEs can manage hidden liabilities
Recent reporting shows the ATO is reviving around 160,000 small-business debts that were previously marked “on hold” - some as low at $8.65 and some dating back more than a decade. These debts weren’t chased at the time because they were too small or uneconomical to recover, but they’re now being added back into businesses’ account balances, sometimes without owners realising.
For SMEs, that matters. Unknown liabilities can disrupt cash flow, impact lending, or create issues with partners, suppliers and investors. And it’s not just about your own business - hidden debts in the businesses you deal with can be just as risky.
What kinds of hidden debts can catch SMEs off guard?
- On-hold ATO tax debts (now being re-activated)
- Superannuation guarantee liabilities, which can accrue heavy penalties
- Old interest and charges that quietly build up over time
- Late-payment histories with suppliers or creditors
- Legacy errors in BAS, payroll or record-keeping
Case Study: Our team at Bizly recently spoke with a small café that believed everything was fully up to date - BAS lodged, payroll tidy, super paid. But during a routine due-diligence check by a prospective buyer, an old super guarantee shortfall from two years earlier surfaced. The amount wasn’t huge, but the timing was disastrous: the sale stalled, terms were renegotiated, and the owners lost weeks scrambling to fix an issue they didn’t even know existed.
How to check for hidden liabilities in your business
1. Review your ATO online services
Check if any “debts on hold” have reappeared or if interest has begun accruing.
2. Reconcile payroll and super
Make sure SGC lodgements match payroll history. Small gaps often hide the biggest issues.
3. Look back 2–5 years
Old BAS amendments, PAYG instalments, or forgotten payment arrangements are common sources of surprises.
4. Ask your accountant directly
“Do we have any liabilities on hold or historical items that could be reactivated?”
How to avoid being caught out by someone else’s debt
Before you engage a key customer, supplier or contractor:
Check their Bizly profile for ASIC filings, public risks and trust indicators
- Review how long they’ve been operating and whether their lodge-on-time behaviour looks stable
- Set up Bizly monitoring so you’re notified if anything changes — charges, inactivity flags, new risks
Hidden liabilities are manageable, but only if you can see them. A quick profile check or monitoring alert can save you from being blindsided when the ATO or a counterparty brings an old issue back to life.
