Clients with large ato tax debts above $10,000 not actively engaging with the ATO will soon have their detail released to Credit Reporting Agencies.  This may impact on SME’s ability to obtain credit and in some circumstances hasten a companies demise.

Once the legislation has received royal assent the ATO has advised the following will apply:

Per ATO website

While the specific circumstances and exceptions for disclosure will be subject to public consultation and confirmed through the passage of law, the ATO will only disclose tax debt information of a business to a CRB if the business meets all of the following criteria:

  • it has an Australian Business Number (ABN)
  • it has a tax debt of at least $10,000 that is overdue by more than 90 days; and
  • it has not effectively engaged with the ATO to manage its tax debt.

Businesses who effectively engage with the ATO to manage their tax debts will not have their tax debt information reported to CRBs. The definition of effective engagement will be subject to public consultation, but it is expected to include businesses who have established a payment plan or are disputing their tax-related liabilities.

The ATO will notify a business if they meet the reporting criteria, advising that they have 21 days to respond before their tax debt information is reported to CRBs.  The ATO will negotiate and establish agreements with CRBs to establish the appropriate protocols and governance arrangements.