The ATO has shifted its focus from providing assistance with tax through the pandemic to now re-establishing the culture of businesses paying their tax debts on time.
Beginning from July 2023, The ATO has issued notices of intent to disclose business tax debts of more than 22,000 businesses with a tax debt of at least $100,000 that is overdue by more than 90 days, to credit rating agencies (CRAs).
Disclosure of business tax debts
The ATO may report your business tax debt if it meets the following criteria:
- you have an ABN and your business in not an excluded entity
- you have one or more tax debts and at least $100,000 is overdue by more than 90 days
- you are not engaging with the ATO to manage your tax debt
- you don’t have an active complaint with the Inspector-General of Taxation Ombudsman (IGTO) about our intent to report your tax debt information.
The Commissioner has urged taxpayers, with outstanding debts, to engage with the ATO to not risk their business’s tax debts becoming visible in credit rating checks.
Intent to disclose notice – next steps
Section 255-15 of the Tax Administration Act 1953 empowers the Commissioner to enter into an arrangement with an entity which has, or which is expected to have, a tax-related liability, whereby the entity may pay the liability by instalments.
Businesses need to pay their debt or enter into an appropriate payment arrangement within 28 days of when the intent to disclose notice was issued to prevent disclosure.
In October 2023, more than 9,000 businesses are expected to have their debts disclosed and the ATO expects to issue 50,000 notices of intent to disclose by the end of 2023–24 financial year. A disclosed debt can impact your business’s ability to receive finance and your business may also lose suppliers.
Contact us
If you have received a notice of intent or have a tax debt of $100,000 or more that is overdue by more than 90 days, we can assist you in engaging/re-engaging with the ATO and help create an arrangement or payment plan that best suits your current and future financial position.
The team at EMspire Advisory are trusted, qualified Chartered Accountants, tax agents, and small business accountants. We work closely with our clients to achieve the best possible outcomes. To find out more, please contact us!
Please note that this information is not specific and is general in nature and cannot be relied on as advice. Please contact us for advice specific to you and your circumstances.