Starting from 1 July 2017, the Australian Taxation Office (ATO) will have the authority to share tax debt details with Credit Reporting Bureaus. This regulation will exclusively impact businesses holding an Australian Business Number (ABN) and having an outstanding tax debt exceeding $10,000 for over 90 days. However, this disclosure will not apply if the taxpayer has actively sought assistance from a tax advisor and established a suitable payment plan to address the debt.
A tainted credit history can make financing a small business complex, 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 of the new measures on small businesses.
To avoid being impacted by these new measures, you should:
- Regular Tax Planning: Undertake tax planning on a regular basis to ensure you are aware of upcoming tax debts well before they fall due.
- Cash Flow Management: Maintain up-to-date cash flow forecasts to accurately assess and plan for your tax obligations. This approach ensures that you have a clear understanding of your financial position, allowing you to secure financing if needed in a timely manner and avoid falling into tax debt.
- Negotiate Payment Arrangements: If you find yourself unable 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 get in touch with us if you have any concerns about the new rules.
Kreston Stanley Williamson Team
*Correct as of February 2017
Disclaimer – Kreston Stanley Williamson has produced this article to serve 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 in this article, you must seek advice about your circumstances. Liability is limited by a scheme approved under professional standards legislation.