Complaints to the Tax Ombudsman Are Up 180%: What It Means if Your Company Owes the ATO

Key takeaways

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  Complaints to the Tax Ombudsman reached 2,376 in April to September 2026, 74% more than a year earlier and 180% more than two years earlier, with tax debt and interest among the main causes.
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  Director penalty notices are the most common debt complaint the Tax Ombudsman investigates, and its review of how the Australian Taxation Office handles those notices is not due until next year.
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  In the Tax Ombudsman's April to September 2026 figures, penalties or interest were reduced or remitted in only 5% of the penalty and interest complaints it handled.
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  The Australian Taxation Office's general interest charge is 11.51% a year for October to December 2026, compounds daily, and keeps accruing on a tax debt while any complaint or payment plan runs.
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  A Secured Lending short-term business loan, from $250,000 and secured by a first or second mortgage over real property, can give a company the funds to pay its ATO debt in full, and can settle within 24 hours.
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  A company can pay its ATO debt with a Secured Lending loan and still pursue a complaint about how it was treated, with its accountant or tax agent handling the complaint separately.

Complaints to the Tax Ombudsman are rising fast. The Tax Ombudsman, the independent body that investigates complaints about the Australian Taxation Office, received 2,376 complaints in the six months to September 2026, 180% more than in the same period two years earlier. Debt collection, director penalty notices and the interest charged on tax debts sit near the top of the list.

If your company owes the ATO, those figures may read like a description of your own year. It helps to separate two questions, though. A complaint deals with how your company was treated. The debt itself still has to be paid, and the general interest charge is added to it every day until it is.

That is where we can help. A short-term loan secured by property can give your company the funds to pay the ATO in full, while your accountant takes any complaint forward on its own track. We lend our own funds, we can usually tell you within hours whether we can proceed, and we can settle within 24 hours.

What the Tax Ombudsman's report found

The figures come from the Tax Ombudsman's complaints insights report for April to September 2026, published on 27 October 2026 and covered by Accountants Daily the next day. The office received 2,376 complaints in those six months, up from 1,362 in the same period of 2025, a rise of 74%. The number it went on to investigate rose by more than 28%. Announcing the report, Tax Ombudsman Ruth Owen said: "We continue to see an unprecedented demand for our services."

Of the 501 complaints the office investigated, three subjects made up more than half:

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  Debt collection, at 19% of investigations. Director penalty notices were the most common debt complaint, followed by applications for release from a debt on hardship grounds, disputes over how a debt was calculated, and debts the ATO had raised again after not pursuing them earlier.
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  Penalties and interest, at 18% of investigations, up from 13% a year earlier. The general interest charge accounted for 77% of these complaints.
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  Payments owed to taxpayers, such as superannuation and tax refunds, at 19%.

In debt collection complaints, the office found that the ATO had acted reasonably in 63% of cases, down 9% on the year before. The report itself cautions that it is based on a relatively small sample, so percentage movements should be read with some caution. It also links part of the rise to the ATO stepping up its debt collection to reduce the amount of tax owed to it.

What a complaint can and cannot do about the debt

The Tax Ombudsman does valuable work. Its complaints page explains that you first raise the problem with the ATO, and the office looks at it if the ATO has not resolved it. According to its report, the office can explain a decision, ask the ATO to look again, and in some cases secure a reduced debt, a faster payment or interest removed.

For a business, though, the figures on interest are the ones to read closely. In the penalties and interest complaints the office handled in April to September 2026, penalties or interest were reduced or remitted in 5% of cases. The report says this is down 17% on the same period last year, and puts the fall down to the ATO's tougher approach to reducing or remitting penalties and interest. Director penalty notices are the subject of a separate review by the office, which is due to be published next year.

None of this means a complaint is not worth making. If your company has been treated unfairly, your accountant or tax agent can advise on a complaint, an objection or a request to remit interest, and we do not give tax advice. It does mean a complaint is not a plan for paying the debt. The amount owed is still there at the end of the process in most cases, and so is the interest that built up on it while the complaint was worked through.

What the debt costs while it is disputed

The general interest charge is the main reason an ATO debt grows. For October to December 2026, it is 11.51% a year, according to the ATO's general interest charge rates table. The rate is reset every quarter, and three things about it matter if your company is behind:

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  It compounds daily, so the balance on the day you pay will be higher than the figure on the last ATO letter.
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  General interest charge incurred in income years starting on or after 1 July 2025 can no longer be claimed as a tax deduction.
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  It keeps accruing on a payment plan, as the ATO explains in its small business newsroom article on interest on ATO debt.

Over months, the interest can grow to a large share of the debt. The Tax Ombudsman's report puts it plainly: "Quite often we see complaints where the interest charge is greater than the tax owed and taxpayers are seeking some relief (remission) of interest to enable them to meet their original obligations."

The ATO's own advice is to pay as soon as possible and to talk to a registered tax professional. Its newsroom article adds: "Their advice may include a business loan, as some interest on loans connected with running a business may be eligible for a tax deduction." How the interest on any loan is treated for tax is a question for your accountant.

How a short-term loan clears the ATO debt

A Secured Lending loan gives your company the funds to pay its ATO debt in full, in one payment. Your company is the borrower, the funds are paid to it at settlement, and it then pays the ATO itself. Once the debt is paid, the general interest charge stops accruing on it, and any complaint about how the debt was handled can continue separately.

The loan is secured by a first or second mortgage over residential, commercial or industrial property. That might be the commercial or industrial property your company owns, a director's home or investment property, or property held in a company or a trust. The main terms are:

One loan can pay income tax, goods and services tax, other activity statement debts and superannuation guarantee charge together, as long as the total stays within 70% of the property's value. A live ATO debt on its own is not a reason for us to decline. We can also still lend after a garnishee notice, a director penalty notice or a statutory demand has arrived. If one of those notices already has a date on it, our page on a short term loan to pay an ATO debt before a garnishee, director penalty notice or wind-up deadline covers that timetable, and our guide to what a director penalty notice means and its 21 days explains the notice itself.

How the loan is repaid

The exit is agreed before settlement, so everyone knows from the start how the loan will be repaid: for example, a refinance to a bank once the ATO debt is cleared, or the sale of a property. When the loan is repaid, our mortgage is discharged from the title.

If you would like to see the numbers, our worked example of clearing a $250,000 ATO debt with a property refinance takes one illustrative property through the 70% calculation, the monthly interest and the exit.

Case study: $1.1 million to clear an ATO debt in two business days

A growing company had built up a $1.1 million ATO debt from obligations it had deferred during the pandemic, and the ATO was calling the debt in. A bank could not act in time, and the directors did not want to use the company's working capital to pay it.

We structured a $1.1 million loan, blending a first and a second mortgage over the company's unencumbered commercial premises, within 48 hours of the first call. The funds were released within two business days, and the ATO debt was cleared in full.

The company kept its working capital for running the business, and its suppliers and staff were not affected.

Frequently asked questions

Does a complaint to the Tax Ombudsman stop the ATO collecting the debt?

The Tax Ombudsman's complaints page does not say that a complaint pauses debt collection or interest. Your accountant or tax agent can tell you how a complaint, an objection or a remission request affects your company's debt.

Can my company pay its ATO debt and still make a complaint?

Yes. A complaint is about how the ATO handled your company's matter, and paying the debt does not stop your accountant raising it. Paying the debt stops further general interest charge accruing on it.

How likely is the ATO to remove the interest on my company's debt?

The figures give only a broad guide. In the Tax Ombudsman's April to September 2026 report, penalties or interest were reduced or remitted in 5% of the penalty and interest complaints it handled. Every case is different, and your accountant can advise on a remission request.

Can a loan pay a director penalty notice amount?

Yes. We can lend after a director penalty notice has arrived. The loan is made to your company, which uses the funds to pay the ATO, and it is secured by property your company or a director owns.

Can my home secure a loan to pay my company's ATO debt?

Yes. Your company is the borrower, and a director's home or investment property can secure the loan. The loan funds are paid to your company, which then pays the ATO.

How Secured Lending Can Help

If your company is carrying an ATO debt while a complaint, objection or remission request is under way, we would be glad to help it clear the debt so the general interest charge stops accruing. Our loan gives your company the funds to pay the ATO in full, secured by property your company or a director already owns, and it is repaid through an exit agreed at the start, such as a bank refinance or a property sale.

Speed is what makes a private loan suit a tax debt. We lend our own funds, so nothing waits on another funder. In most cases we decide within hours, issue a letter of offer as soon as terms are agreed, and can settle within 24 hours.

If you would like us to look at your situation, it helps to have these to hand:

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  The ATO statement of account, and any notice your company has received, with its date.
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  The property that could back the loan, its estimated value and any existing loan on it.
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  How your company plans to repay the loan, and roughly when.

You are welcome to call us on 1300 795 175 to talk it through, or send the details through and we will come back to you. Your accountant is welcome to call us too.

Gino Tabila

Associate Director

Mark Hutchins

Managing Director