Businesses that put off paying large tax bills for too long may soon find that the Australian Taxation Office (ATO) has notified credit reporting bureaus.
The proposal is part of The Treasury Laws Amendment (2019 Tax Integrity and Other Measures No.1) Bill, which was recently introduced into parliament.
The Bill will provide the ATO with the discretion to disclose to credit reporting bureaus when a business has a debt of $100,000 for 90 days or more.
“This will reduce the unfair advantage obtained by businesses who do not pay their tax debts and will encourage businesses to engage with the ATO to manage their tax debts,” says assistant treasurer Michael Sukkar.
Credit reporting bureau CreditorWatch adds: “By (the ATO) disclosing this information, the default would be visible on a commercial credit report and the credit scores of companies could be negatively affected.”
Will it be a hard and fast rule?
Unlikely – the key word above is “discretion”.
Mr Sukkar says it will apply to “particular businesses that are not effectively engaging with the ATO to manage their tax debts”.
So, if this applies to you and your business, the most important thing you can do is not bury your head in the sand.
This might apply to me – what are my options?
First, get in touch with the ATO, which encourages businesses to engage with it to manage their tax debts. You may be able to enter into a “sustainable payment plan” that is agreed upon by both parties.
However, not everyone enjoys the ATO impatiently hovering over their shoulder waiting for them to pay off a large tax debt.
If you’re one of those people, it’s definitely worth getting in touch with us to explore some of your other options with business loan lenders.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.