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Important changes to ATO tax debts from 1st July 2017

In the recent 2016-17 Mid-Year Economic and Fiscal Outlook released by the Australian Government, a significant announcement was made in relation to improving the transparency of taxation debts.

From 1 July 2017, the Government will allow the Australian Taxation Office (ATO) to disclose to Credit Reporting Bureaus (e.g. Dun & Bradstreet) the tax debt information of businesses that have not effectively engaged with the ATO to manage these debts.

The ATO does not currently provide this information.

This measure will initially only apply to businesses with Australian Business Numbers and tax debt of more than $10,000 that is at least 90 days overdue.

Businesses are expected to pay taxation debts in a more timely manner to avoid affecting their credit rating.

In an interview with Accountants Daily, CreditorWatch managing director Colin Porter said businesses that fail to address outstanding tax debts prior to FY2017-18 should expect their credit rating to be adversely affected.

“The information that’s being disclosed is tax debt over the value of $10,000, which is actually in default,” Mr Porter told Accountants Daily.

“Then it’s on their commercial credit file for five years. It’s a very serious default.”

If businesses don’t secure payment arrangements with the ATO prior to July 1st, this could greatly impact their ability to secure finance in the future or to secure supplier credit arrangements.

If you require assistance to determine if these new measures affect you please call us on 1300 760 660  or contact via email: emile@empirebiz.com.au

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