ATO threatens to disclose business tax debts to credit reporting agencies
The ATO has issued a stern warning to businesses with big tax debts, saying it will disclose them to credit reporting agencies.
The Australian Taxation Office (ATO) has issued a warning to businesses with substantial tax debt, or that have failed in their superannuation obligations to pay up or be disclosed to credit reporting agencies.
The ATO has said that it is pivoting back to its pre-pandemic “business as usual” debt collection strategy, issuing over 22,000 businesses with warnings since July 2023.
According to the agency, businesses with tax debts exceeding $100,000 and are overdue by more than 90 days are now in danger of having the debt disclosed to credit reporting agencies.
In October it expects 9,000 Australian businesses to have their debts disclosed. This means that the debt will become visible on credit rating checks, which could have an impact on future financing and supplier relationships. It also expects over 50,000 notices of intent to be issued across the 2023-24 financial year.
A disclosed debt can impact a business’ ability to receive finance and they may lose suppliers.
But according to assistant commissioner, Jillian Kitto, businesses can avoid this happening by either paying their debts or getting in contact with the ATO.
“We want to work with businesses to help them get on top of their debts. Anyone with a debt is encouraged to reach out to us as soon as possible,” Kitto said in a statement.
“We give businesses ample opportunity to re-engage with us. However, those who show continued and ongoing disregard for their tax and super obligations will have their debts disclosed.”
According to the ATO, businesses will need to pay the debt or enter an “appropriate” payment agreement within 28 days of when the intent to disclose notice was sent.
“Through the pandemic we shifted our focus from debt collection to stimulus payments and assistance with tax, but it is now time to re-establish the culture of paying tax on time,” Kitto said.
“There is over $5 billion owed by businesses who currently meet the criteria for disclosure. We must draw a line in the sand to protect the Australian community and other creditors, and to ensure a level playing field for businesses who do the right thing.”
This is just the latest in ATO crackdowns, with the agency recently revealing 21 convictions in the $4.6 billion GST fraud scam that went viral thanks to TikTok. Just last month a Mildura man was jailed for receiving $837,437 in false GST refunds.
