The current total outstanding tax debt owed to the ATO $19.2 billion. Small businesses account for 65.2% of this debt (or $12.5 billion). As part of its Mid-Year Economic and Fiscal Outlook, the Federal Government announced that from 1 July 2017 they would report certain tax debts to credit agencies.
The proposed measures will apply to taxpayers that are businesses with an ABN. It is proposed that the ATO will report outstanding debts to credit agencies where those debts are:
* More than $10,000;
* More than 90 days overdue; and
* Not being actively managed by the taxpayer and the ATO (eg. covered by a payment plan).
These notifications will then remain on credit files for 5 years.
We recommend that businesses:
1. Review cashflow and ensure sufficient funds are being put aside to meet tax obligations as and when they fall due;
2. Actively engage the ATO where to discuss tax debts where on time payment is not possible.
It is important that you communicate with your advisers or the ATO if you encounter cashflow issues as these proposed measures can adversely affect your business’ credit rating. Call us today on (07) 5665 6469 if you would like to discuss your ATO liabilities and your potential available options.
DISCLAIMER: The information in this article is general in nature and is not a substitute for professional advice. Accordingly, neither TJN Accountants nor any member or employee of TJN Accountants accepts any responsibility for any loss, however caused, as a result of reliance on this general information. We recommend that our formal advice be sought before acting in any of the areas. The article is issued as a helpful guide to clients and for their private information. Therefore it should be regarded as confidential and not be made available to any person without our consent,
Jeanette has over 20 years experience as an accountant in public practice. She is a Chartered Accountant, registered tax agent and accredited SMSF Association advisor. When she is not helping business owners grow their empires, you will likely find her out running on the trails or at the gym. Book in to see Jeanette today.
