From 1 July 2017 the ATO will be allowed to disclose tax debt information to Credit Reporting Bureaus. The new measure will only apply to businesses with an ABN that have a tax debt of more than $10,000 overdue by more than 90 days, where the taxpayer hasn’t effectively engaged with the ATO to manage the debt (eg by entering into a payment arrangement).
A tainted credit history can make financing a small business extremely difficult, and an overdue account can remain on your file for up to 7 years. This article written by Robert Gottliebsen on 9 January 2017 raises much concern about the potential impact the new measures may have on small businesses.
To avoid being impacted by these new measures you should:
- Undertake tax planning regularly to ensure you are aware of upcoming tax debts well in advance of them falling due.
- Maintain up-to-date cashflow forecasts to take into account your tax obligations, allowing you to seek finance where required in a timely fashion.
- Should you find yourself in a position where you’re not able to make your tax payment on time, be sure to negotiate an agreeable payment arrangement with the ATO to avoid the debt being reported.
Our team at S & W can help with any of the above, so please contact your client manager if you have any concerns about the new rules.
Kreston Stanley Williamson Team
*Correct as of February 2017
*Disclaimer – this article has been produced by Kreston Stanley Williamson as a service to its clients and associates. The information contained in the article is of general comment only and is not intended to be advice on any particular matter. Before acting on any areas contained in this article, it is imperative you seek specific advice relating to your particular circumstances. Liability limited by a scheme approved under professional standards legislation.