In 2019, the Federal Parliament passed the Treasury Laws Amendment (2019 Tax Integrity and Other Measures No. 1) Act 2019. This legislation allows the ATO to, among other things, disclose the details of a company owing more than $100,000 in tax debt to credit reporting agencies (CRAs) e.g. Equifax, Illion and Experion.

The ATO however, has not materially used these powers due to the ongoing effects of the COVID-19 on businesses. Things are however are beginning to change.

Clients of several of our accountant partners have received letters from the ATO warning them that they will be reported to CRAs if nothing is done within 28 days. This is part of the ATO’s effort in compelling businesses to comply with their tax obligations.

The clients who have received these warning letters will have had to have had debts which meet the criteria for such a referral, being:

• The debts must relate to an Australian Business Number;
• The debt must total at least $100,000 and be due and payable by more than 3 months;
• The taxpayer must not have been engaging with the ATO; and
• The tax debt must not be subject to an active dispute.

What should you do if you received such notice?

If you received such a notice from the ATO, the first thing you should do is to speak to your accountant or an insolvency practitioner. You are given 28 days to engage with the ATO, failing which your business’ details will be disclosed to CRAs.

A qualified professional will be able to engage the ATO on your behalf and will be able to advise you on the options available. Such options include negotiating with the ATO for a payment plan or arrangement to pay the tax debt in instalments.

We can help

TAX DEBT SOLVED is a led by partners who have more than 20 years of experience in helping companies deal with tax debts. If your company has difficulty paying its tax debts, contact us for a free no-obligation consultation.