The ATO’s attention has shifted from aiding businesses during the pandemic to reinforcing the importance of timely tax payments.
Starting July 2023, the ATO has alerted over 22,000 businesses about its intent to disclose tax debts exceeding $100,000 and overdue by 90 days or more to credit rating agencies (CRAs).
Conditions for Disclosure
The ATO may report a business’s tax debt if it meets these criteria:
- Holds an ABN and is not an excluded entity
- Owes at least $100,000 overdue by more than 90 days
- Lacks engagement with the ATO to manage the debt
- Doesn’t have an active complaint with the Inspector-General of Taxation Ombudsman (IGTO) regarding the intent to disclose the debt.
The Commissioner encourages taxpayers with outstanding debts to collaborate with the ATO to prevent their business’s tax liabilities from affecting their credit ratings.
Intent to Disclose Notice – What’s Next
Under Section 255-15 of the Tax Administration Act 1953, the Commissioner may arrange instalment payment options for entities with tax-related liabilities.
To avoid disclosure, businesses must settle the debt or establish a suitable payment plan within 28 days of receiving the intent to disclose notice.
By October 2023, over 9,000 businesses may face debt disclosure, with the ATO anticipating 50,000 disclosure notices by the end of the 2023–24 fiscal year. A disclosed debt can hinder finance acquisition and supplier relationships.
Get in Touch
If you’ve received an intent notice or hold a tax debt over $100,000 overdue by 90 days, we can aid in liaising with the ATO to devise a payment plan aligned with your financial circumstances.
For further inquiries, don’t hesitate to contact our office.
