Will ATO legislation block your access to credit?
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Business tax debt to become reportable to credit rating agencies
Recently proposed legislation which would allow the Australian Tax Office (ATO) to report business tax debt to credit rating agencies is creating a lot of debate. The ATO hopes it will stop non-compliant companies from holding an unfair cashflow advantage over those who work hard to be in the black, but others are worried that it has the potential to pile stress on already-struggling Australian business owners and restrict their access to much-needed finance.
Either way, while the ATO can see nearly $24 billion of outstanding tax debt from Australian businesses, it will clearly look for effective ways to encourage compliant tax behaviour. The best way to avoid impact from this legislation is, obviously, to ensure you’re up-to-date with business tax commitments.
However, the reality is that this is simply not workable for all businesses, all of the time. We know this because we hear first-hand from our clients – Australian companies of all types and sizes – how they have (mostly inadvertently) found themselves unable to meet their ATO commitments. There is often a lot of personal stress and anguish involved.
Make a plan now
While this legislation is currently being debated in the Senate, now is the time to make a plan if you or your clients have business tax debts of more than $100,000, overdue for more than 90 days. So… how to start that plan?
To avoid the credit rating hit this legislation could deliver, companies do not have to pay their overdue tax debt right away in full. If a company is actively engaging with the ATO to manage its debt, the proposed legislation says it will not have that debt disclosed to credit rating agencies.
This is where we at Tax Assure come in. Our sole job is to help businesses resolve tax debt. Once we’ve contacted the ATO on a client’s behalf, we agree an immediate halt to any action. Then we negotiate directly with the ATO to agree a viable, sustainable payment plan.
We can often reduce the overall debt too, by applying for a cancellation of penalties and interest charges which accrue (at an often alarming rate!) on the outstanding debt.
With a tailored payment plan in place this heavily-debated legislation can effectively become an irrelevance – the ATO is happy because they no longer have to chase the debt, and our clients are happy because they can get on with running their business without worrying about their credit rating. Win-win.
Get in touch with us today to get ahead of the legislation, if you or your clients have outstanding tax debt. We’d love to help.
