Sign In

* You are about to leave the Modoras website and be directed to Sage Handisoft - our cloud accounting software partners.

Insights

Disclosure of business tax debts

davidarmstrong_img1
Published by:
David Armstrong
Published on:
May 03, 2022
Modoras Accounting (SYD) Pty Ltd ABN 18 622 475 521
Disclosure of business tax debts

The ATO is in the process of writing to taxpayers that may be eligible to have their tax debts disclosed to credit reporting bureaus (‘CRBs’).

The ATO can potentially report outstanding tax debts to a CRB where the following criteria are satisfied:

  • The taxpayer has an Australian business number and is not an excluded entity;
  • The taxpayer has one or more tax debts and at least $100,000 is overdue by more than 90 days;
  • The taxpayer is not engaging with the ATO to manage their tax debt; and
  • The taxpayer does not have an active complaint with the Inspector-General of Taxation about the ATO’s intent to report its tax debt information.

Excluded entities are a deductible gift recipient, a complying superannuation fund, a registered charity and a government entity. The purpose of this letter from the ATO is to raise awareness of the actions that the ATO can now take under the Disclosure of Business Tax Debts measure.

The letter will be sent to all taxpayers with business tax debts that currently meet the criteria (discussed above) for disclosure. This letter from the ATO provides business taxpayers with information on how to effectively engage with the ATO to manage their tax debt.
Taxpayers can avoid disclosure to a CRB by making payment in full or negotiating a payment plan.

If an eligible taxpayer does not take steps to actively manage their debt, they will remain eligible for disclosure.

Before the ATO takes any final action to disclose a tax debt, it will issue the taxpayer with a formal Intent to Disclose Notice.

If a taxpayer receives an Intent Notice, we advise taxpayers to ‘Act now or your tax debt will be reported to credit reporting bureaus’, the taxpayer or their tax agent must contact the ATO within 28 days of receiving the notice to avoid the debt being reported. It is crucial for taxpayers to engage with the ATO early before their debts become unmanageable.

Editor: If the ATO reports a taxpayer that has an outstanding debt to a CRB, this can have a negative impact on the individual’s credit rating.
This in turn may affect the individual’s ability to borrow from banks and other financial institutions.

IMPORTANT INFORMATION: This blog has been prepared by Modoras Accounting (SYD) Pty Ltd ABN 18 622 475 521. The information and opinions contained in this blog is general information only and is not intended to represent specific personal advice (Accounting, taxation, financial, insurance or credit). No individuals’ personal circumstances have been taken into consideration for the preparation of this material. The information and opinions herein do not constitute any recommendation to purchase, sell or hold any particular financial product. Modoras Accounting (SYD) Pty. Ltd. recommends that no financial product or financial service be acquired or disposed of or financial strategy adopted without you first obtaining professional personal financial advice suitable and appropriate to your own personal needs, objectives, goals and circumstances. Information, forecasts and opinions contained in this blog can change without notice. Modoras Accounting (SYD) Pty. Ltd. does not guarantee the accuracy of the information at any particular time. Although care has been exercised in compiling the information contained within, Modoras Accounting (SYD) Pty. Ltd. does not warrant that the articles within are free from errors, inaccuracies or omissions. To the extent permissible by law, neither Modoras Accounting (SYD) Pty. Ltd. nor its employees, representatives or agents (including associated and affiliated companies) accept liability for loss or damages incurred as a result of a person acting in reliance of this publication. Liability limited by a scheme approved under Professional Standards Legislation.

Latest Insights