ATO can now report on your business credit worthiness
New draft legislation, once passed, will give the ATO the ability to release information about your businesses credit worthiness to credit reporting bureaus. The Government has moved to make this change, reporting that transparency of overdue tax debts gives more informed decision making processes in the business community, and seeks to reduce unfair advantage gained by businesses who do not pay their tax debts on time.
Under the new legislation, only those businesses who meet the following criteria will have their information released to credit reporting bureaus:
- The business must have an ABN and is not an excluded entity
- The business must have a tax debt of at least $10,000 which is overdue by more than 90 days, and
- The business is not actively engaging with the ATO regarding payment of the debt
The ATO will be required to notify a business if they meet the reporting criteria, giving them 21 days to respond before their tax debt information is reported to credit reporting bureaus.
Businesses who actively engage with the ATO to manage any tax debts can continue to work with the ATO privately on settlement of these debts, and they will NOT have their information released to credit reporting agencies.
The public consultation period closed in February 2018, and the ATO is consulting with business and industry groups to ensure that any measure is implemented and administered effectively, subject to the legislation passing.
More information on the legislation and FAQ’s can be found at the ATO website at this link:
If you are looking for advice around how you can improve your business cashflow to meet your liabilities and loan payments when they all due, talk to your trusted advisor at PJT about how we can assist you.