In December 2016 the Treasurer of The Commonwealth of Australia Mr Scott Morrison presented the 2016/2017 Mid-Year Economic and Fiscal Outlook (MYEFO). MYEFO proposes a number of tax changes, one of which, allowing the Australian Taxation Office (ATO) to disclose to credit ratings agencies details regarding the business’s tax debt. The MYEFO says: “Businesses are expected to pay taxation debts in a more timely manner to avoid affecting their credit rating.”
How to have a good Company Credit Rating
Tax debt is the amount of tax incurred during previous financial years that you still owe to the ATO. If you can’t pay on time, it is important to liaise with the ATO in this regard. You still need to lodge your activity statements and tax returns on time, even if you cannot pay by the due date. In this case you will avoid a penalty for failing to lodge on time and show the ATO that you are aware of your obligations and doing your best to meet them.
From 1 July 2017, the Government will allow the Australian Taxation Office (ATO) to disclose to credit reporting bureaus the tax debt information of businesses that have not effectively engaged with the ATO to manage these debts. This may affect the business’s ability to acquire finance. The ATO does not currently provide this information. This measure will initially only apply to businesses with Australian Business Numbers (ABN) and tax debt of more than $10,000 that is at least 90 days overdue and have not made arrangements with the ATO.
If you have any outstanding debt with the ATO and are having trouble keeping up with your tax payment obligations, it is imperative that you seek immediate professional advice, to ensure you avoid the various high costs and serious penalties that may be enforced. Here at the Quinn Group, our team of experienced Tax Lawyers and Tax Accountants are able to assist you with the negotiation of your tax debt with the ATO. For more information submit an online enquiry or call us on +61 2 9223 9166 to book an appointment.