From 1 July this year, the ATO will be able to pass on to credit agencies the tax debt information of businesses that have not effectively engaged the ATO to manage these debts.
This should encourage business to pay taxation debts in a more timely manner to avoid affecting their credit rating. It may also have an impact on trade credit, traditional small business funding and banks tightening up their funding options for businesses with tax debts.
The criteria to be applied by the ATO is that a business has a tax debt greater than $10,000, the debt is older than 90 days, is not in dispute and the business has no payment plan with the ATO.
The ATO will notify beforehand any business that it intends to refer its tax debt too a credit bureau.
Should any clients be concerned that they may be in this position please contact our office for advice.