TAX DEBT REPORTING
Earlier this year, as part of the Federal Government’s Mid-Year Economic and Fiscal Outlook (MYEFO), there was an announcement that from 1 July 2017 the ATO can give information regarding the tax debts of businesses who have not been forthcoming to Credit Reporting Bureaus (CRB).
This is something that the ATO has not before been able to do and should come as concern for all business owners, especially those that have had issues with tax debts and lodgement issues in the past.
Why are they doing this? As many of you will have noticed the ATO have stepped up their efforts in debt collection quite dramatically in recent years, they are definitely offering less leeway than they have in years gone by. This is, in part, due to the fact the ATO is currently owed over $19 billion in unpaid taxes with over two thirds of that amount being owed by small businesses.
Who will this affect? Individuals and companies with an ABN that have a tax debt of over $10,000 that has been outstanding for more than 90 days. It shouldn’t affect those in legitimate payment arrangements nor anyone who is ‘effectively engaging’ with the ATO (i.e. don’t ignore their calls and letters).
Failing to play by the ATO rules and getting reported to the CRBs can have a serious impact upon you and your business as a default with the ATO can result in a black mark against your record for up to 5 years. This could stop your business from being able to secure credit or finance of any kind.
Our advice? Stay on top of your lodgement obligations, stay on top of the amounts you owe and if you aren’t able to pay in full and on time be sure to let the ATO know so you can put in place an effective payment arrangement (and be sure to honour the arrangement).
If you’ve got issues in your business you don’t seem to be able to get on top of, why not get in touch? Not only do we provide a full suite of bookkeeping and tax services here at Generate, but we’re also able to help with business coaching, strategy workshops, business plans and much more. You name the problem and I’m sure we can help.