Posted Under: Accounting and Taxation Posted On 02/08/2017
If having a tax debt that you are paying off because of cashflow isn’t frustrating enough, the Government is now allowing the Australian Tax Office (ATO) to report it, so it could affect your ability to get a loan going forward.
The ATO can now disclose tax debt information to registered credit reporting bureaus (CRBs) where the business meets all the following criteria –
- it has an Australian Business Number (ABN)
- it has a tax debt of at least $10,000 that is overdue by more than 90 days; and
- it has not effectively engaged with the ATO to manage its tax debt
Debts genuinely in dispute will not be reported nor will debts under payment arrangement or taxpayers who are working with the ATO to resolve their debt.
If a business does meet the above dot-point reporting criteria, the ATO will notify them and advise them that they have 21 days to respond before their tax debt information is reported to CRBs.
CRBs will then be able to include the tax debt information in their credit reports which are available for purchase by parties who wish to use this information to decide on the credit worthiness of a business. The record remains in place for 5 years and could make it difficult to obtain further finance or to negotiate credit terms with suppliers.
This measure was proposed to commence 1st July 2017, but is not yet law as it is subject to the normal parliamentary process.
If you need assistance with your tax debt or unsure of the process to go through to ensure you do not have any unpaid tax debts, talk with us about how to best manage this.
Please Note: Many of the comments in this article are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice about the information’s applicability to their circumstances.