The Australian Taxation Office (ATO) can now disclose information surrounding businesses’ tax debts to registered credit reporting bureaus. This legislation become law in October 2019. When Covid-19 hit last year implementation was delayed.
The ATO’s new powers represent part of the government’s strategy to improve transparency when it comes to business debt disclosures.
When can the ATO commence action to advise a Credit Reporting Bureau?
If a business has an outstanding ATO debt and it meets the following criteria:
- have an Australian business number (ABN), and are not an excluded entity
- have one or more tax debts, of which at least $100,000 is overdue by more than 90 days
- are not engaging with the ATO to manage their tax debt
Subject to the above the ATO may send the business an “Intent To Disclose Notice” and the business has 28 days to act.
What is the impact?
Disclosure of an unpaid debt by the ATO will affect a company’s credit rating. This could have serious ramifications for small businesses that need support from suppliers and financiers.
What to do?
- If you’re a small business owner with tax worries, it is a good idea to be proactive and liaise and speak with your tax adviser and work proactively with the ATO.
- Ensure contact details such as the company’s email address and postal address are up to date with the ATO
Further information can be found here