The Australian Taxation Office (ATO) is issuing a stern warning to businesses: Settle your tax and superannuation debts quickly or risk having these debts disclosed on your credit reports. Below, we will cover the ATO’s recent actions, the consequences of debt disclosure, and the steps businesses can take to safeguard their credit profiles.

ATO’s Assertive Approach

Since July 2023, the ATO has been proactive in debt collection, sending Notices of Intent to over 22,000 businesses with tax debts exceeding $100,000, overdue by more than 90 days. Over 9,000 businesses are expected to see their debts disclosed to credit reporting agencies this month. Businesses must act promptly to prevent credit report damage.

Collaborative Resolution

The ATO is ready to collaborate with businesses to resolve their debts. Businesses should reach out to the ATO to explore solutions. Those who persistently neglect their obligations will face the consequences of debt disclosure.

Understanding Implications

Debt disclosure can hinder a business’s ability to secure financing and may lead to supplier loss. In today’s competitive environment, this is a significant setback.

Act Swiftly

Businesses have 28 days from the Notice of Intent to clear debts or set up payment plans. With the ATO planning over 50,000 Notices of Intent for the 2023-24 financial year, swift action is essential.

Reestablishing Timely Payments

Reinstating a culture of punctual tax payments is essential. Over $5 billion in debts from compliant businesses are at risk of disclosure. The ATO aims to protect community and creditor interests while promoting fairness.

Businesses must heed the ATO’s warning: Act swiftly to settle tax debts or engage with the ATO to protect your credit rating. Avoid the consequences of debt disclosure by taking prompt action, securing your financial stability, and maintaining your business reputation.

Please see the ATO website for further information.