The ATO has issued a new directive that has been in the wind for a long time – but now it’s OFFICIALLY on the table and we’d like you to know about it. Whilst you might ask us the questions about this, we can’t promise you’ll like the answers we give you, but we feel very strongly about increasing your awareness of potential issues that can leave your credit rating in a sorry state.
Please don’t be fooled by our air of the comedy below – this new ruling applies to ALL BUSINESS OWNERS!
So… here it is!
From 1st July, 2017, the Australian Tax Office has the power to disclose any debt you may have to the ATO (if it is above $10,000), and report it to the Credit Reporting Bureaus. This is targeted at businesses with an ABN. You may have a debt and be in negotiations with the ATO about that debt.
This at least shows you are being proactive about it. If that is the case with you and your business, then you will be spared from this new power tool. If you have, however, taken a loaded nail gun approach and have done nothing about your debt to the ATO, with the hope that it will somehow magically be forgotten, then you had better get the sand paper ready to sharpen your pencil, because you may find yourself unable to borrow from lending institutions (and the like) for up to five years.
Many of our Business Owner clients rely on lines of credit to keep their businesses operational, so this new ruling is something you must not ignore. The impact of losing that access to funds could be catastrophic.
In the direct words of the ATO –
“This measure is part of the Government’s strategy to reign in overdue tax and improve transparency of taxation debts, and will initially only apply to businesses with an Australian Business Number and tax debt of more than $10,000 that is at least 90 days overdue.”
Defaulting taxpayers who have not actively or “effectively engaged with the ATO to manage those debts”… may find that those defaults will be recorded on their commercial credit file, which can have “immediate and lasting consequences”, whereby a black mark on your credit file may be registered for five years. This means that credit providers may not supply any further credit to you, and/or withdraw any lines of credit that you already have access to.
At Knox tax, we strongly advise you to get in touch with us if this situation applies to you. We can quickly take steps to help minimise any repercussions of having kept your head in the toolbox, and hoping that the wall you just painted will just dry all by itself, even though it’s pouring with rain!
Please don’t hesitate to talk to us about your ATO Tax Debt
Contact Us at Knox Tax without delay on: 9762 7344
We can’t promise we’ll fix it like Bob the Builder can, but we’ll do our best to assist you, because we have all of the accounting expertise you’ll need to help avert the problem where possible.
As always, with us, you’re in good hands!
Coral Page – Principal