ATO to Disclose Tax Debt Information to Credit Reporting Organisations
Not effectively engaged with the Australian Taxation Office (ATO) to manage ATO debts? From 1 July 2017, the ATO may disclose your debt information to Credit Reporting organisations.
Businesses should note that this is a new initiative from the Government as this information has not been previously disclosed.
Initially, this initiative will only apply to businesses that have:
- An Australian Business Number (ABN); and
- A tax debt exceeding $10,000; and
- Where this debt is at least 90 days overdue.
The disclosure will be made to Credit Reporting Bureaus and could seriously impact on a business’s credit rating thereby making credit either harder to get and/or at higher interest and more restricted terms.
Clearly the ATO is concerned with the time businesses are taking to pay off their debt. This is not an unreasonable step from the ATO and is consistent with what Balanix Solutions has seen in relation to businesses where they have had issues paying ATO debt.
Balanix Solutions always recommends business owners should engage with the ATO to try and resolve debt issues e.g. setting up a payment plan. In the first instance the business owner should talk to their accountant to seek advice and then either have their accountant approach the ATO on their behalf or if they feel confident enough approach the ATO themselves.
If a business owner is having ongoing issues with ATO debt, then there is more likely to be a bigger issue than some short-term cash-flow problems and the business owner should engage their accountant to assist in firstly determining the cause of the problem and then secondly developing a strategy to correct the problem/s.
One thing we know for certain is that if you ignore outstanding debts whether they are to the ATO or some other creditor the problem will only escalate and become bigger. The sooner a you face the issue/s the more likely that the issue/s will be resolved in a satisfactory manner to all parties.
If you have any questions in relation to this information, call Balanix Solutions today on 07 3264 4783.