From 1 July 2017, the Australian Taxation Office (“ATO”) will inform credit rating agencies of businesses that have outstanding tax debts.
If your business has tax debt, you are now required to take steps to engage and work with the ATO to manage and pay off that debt.
If the ATO is not satisfied with your efforts to engage with them, the ATO will disclose the business’ tax debt information to credit rating agencies. The ATO will then ensure that the business owner cannot access new finance or potentially maintain existing finance levels without first dealing with the tax debt to the ATO.
The ATO has indicated that it will report debts that are not in dispute where no payment plan has been established or an existing payment plan has defaulted. Additionally, the debt must be over the sum of $10,000 and remain unpaid for more than 90 days.
Obviously, the changes increase the obligations of business owners and operators however the government hopes it will result in businesses paying their tax debts in a timely manner.
If you consider that these changes will impact you or your business, please contact a member of our experienced Litigation team.