The Federal Government has announced as part of MYEFO that the ATO will be able to disclose to Credit Reporting Bureaus overdue tax debt from 1 July 2017.
If a taxpayer meets all of the following criteria the ATO will be able to disclose debt to specific external parties:
- The entity has an ABN
- The debt is more than $10K
- It is more than 90 days old
- There is no engagement with the ATO to resolve the debt.
The ATO is owed over $19B in overdue tax and the government has a budget deficit problem. Of this overdue debt two thirds is owed by small businesses with turnover of under $2M.
We see some very interesting questions arising from this, apart from the obvious issue of flow on problems to the wider economy.
- What constitutes “engagement with the ATO”.
- Is the disclosure selective or automatic? Given the standard of ATO information systems generally one would hope it is a manual process.
- Will this reporting lead to the standard five year default listing?
One thing is absolutely certain; there is no longer an option to ignore the ATO if you meet the criteria.
Magnus have longstanding expertise in assisting clients manage their ATO liabilities. Contact Warren Maris on 07-3483-0102 for an obligation free discussion to remove the possibility of a five year black mark on your business.