From 1 July 2017, the ATO will provide information to credit reporting bureaus regarding the unsettled tax debts of Australian businesses, starting with debts over $10,000 that are at least 90 days overdue.
This arrangement was announced in the federal government’s Mid-Year Economic and Fiscal Outlook (MYEFO), which stated: “Businesses are expected to pay taxation debts in a more timely manner to avoid affecting their credit rating.”
Consequently, businesses that fail to settle outstanding tax debts prior to FY 2017-18 should expect their credit rating to be adversely affected.
What this means for credit reporting bureaus
The information provided by the ATO will enable bureaus to alert SMEs and Corporates to organisations with tax debt, thus enabling creditors to recover bad debt before tax office wind up notices are issued, when it is too late.
Colin Porter, Managing Director at CreditorWatch, a leading Australian credit reporting bureau, worked with relevant directors at the ATO to ensure legislation for the publication of tax debt data. Mr Porter acted on behalf of small businesses who are all too often the bearers of payment defaults.
“The ATO is the largest creditor in Australia so this arrangement will allow creditors to identify businesses with tax debt and will have a widespread effect for minimising bad debt as a whole,” he said.
To learn more about CreditorWatch, please contact Ravina Krishna on 0405 054 019 or email firstname.lastname@example.org
CreditorWatch is a commercial credit reporting bureau with over 40,000 customers, from sole traders through to ASX listed companies. CreditorWatch provides credit risk information on any entity in Australia and assists creditors by monitoring and sending alerts for risk indicators that may affect a debtor’s repayment ability.