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Business tax debt to be reported to credit agencies from 1 July 2017!
When the Federal Government released their Mid-Year Economic and Fiscal Outlook (MYEFO) it included a statement that from the 1st July 2017 the Australian Tax Office will be able to disclose your outstanding small business tax debt to Credit Reporting Agencies!
As a default stays on your credit file for 5 years, this could severely impact your ability for future finance or supplier credit, which in turn will make it a lot harder to grow your business.
The ATO is currently owed approximately $20 billion in tax debt, two thirds of it owed by small business.
This initiative will first be rolled out to businesses with an ABN and tax debts of more than $10,000 that are at least 90 days overdue.
The best way to avoid this is to TALK to the ATO or your Accountant. If you are struggling with a tax debt the ATO may arrange a payment plan for you, in fact there is a payment plan calculator on the ATO’s website. This will ease the burden and most importantly keep your credit score healthy.
The ATO are generally open to discussion provided you keep the communication channels open.
By Chase Finance
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