Over 10,000 businesses closed their doors for good in 2025. But from my experience, about 80 per cent wouldn’t have needed to if they got advice 12 months earlier. These are three common mistakes I saw businesses make that turned debts from manageable to unmanageable.
Paying late superannuation to the super fund, not the ATO. When a business pays superannuation late, it must be paid to the ATO to apply penalties and interest. If a business pays late superannuation to the super fund, the ATO does not know that the payment has been made and also does not inform the director of the correct process. This means that penalties and interest will continue to accrue in the background until the issue is corrected.
This mistake is often caused by the next mistake: letting go of the accountant and replacing them with a bookkeeper to save money. Bookkeepers play an important role, but the intricacies of tax compliance and director liability require a different level of expertise. This can lead to those interest and penalty accumulation problems quietly building in the background.
The final mistake is waiting too long to seek advice. Business owners can get remissions on tax debts, legal protection from debts, an extended timeframe to repay debts, and formalised debt agreements to stop penalties and interest from accruing. But only if they seek advice early. It’s much easier to work with the tax office if you’ve struggled to pay tax for 12 months compared to five years.
The lessons from 2025 was clear. Most failures were not caused by bad intentions or one big mistake.
They were caused by misunderstandings, delays and underestimating how quickly tax and super debts can grow.