The Tax Office introduced a new piece of legislation just before the end of 2016, allowing them to pass on the details of certain Tax Debts to Credit Agencies such as Equifax. This news needs to be treated with some alarm as being referred to a Credit Agency can make it difficult for businesses (and individuals) to obtain credit in the future.
This does not affect everyone with a tax debt. The legislation only allows the ATO to pass on a debt if it meets the following conditions:
- The client is a SME (small to medium enterprise);
- The tax debt is over $10,000 and more than 90 days overdue;
- The tax debt is not in dispute; and/or
- A payment plan has not been arranged.
So, if you’ve been in touch with the ATO to dispute your debt or arrange a payment plan, this won’t apply to you.
If you do meet the above criteria and think your tax debt may be passed on to a Credit Reporting / Collection Agency, please contact us immediately. We can help you perhaps arrange payment terms with the ATO that could avoid adversely affecting your credit rating.