New legislation from the Government, yet to pass, states that from 1 July 2017, the ATO will be able to disclose debt information to credit reporting agencies of taxpayers that are not effectively managing their debts with the ATO.
To avoid this affecting taxpayer’s credit rating, the ATO encourages payment of taxation debts in a timely manner or engagement with the ATO to resolve their outstanding debt.
Who can the ATO provide tax debt information to?
- Other businesses (such as suppliers)
- Credit providers
There will be exceptions and specific circumstances for those who effectively liaise with the ATO to resolve their debt, however taxpayers who are not effectively managing their tax debts with ATO will be influenced by this change.
Tax debts will only be reported where:
- The debt is for a taxpayer that has an ABN;
- The debt is over $10,000 and unpaid for more than 90 days;
- The status of the debt is not in dispute;
- A payment plan is not in place or an existing payment plan has defaulted.
The ATO will notify any taxpayer of its intentions to refer the debt to credit agencies prior to passing on any information.
The specifics of this legislation are still to be confirmed to ensure that the measure is implemented and administered effectively and as soon as we know more we will update our clients.
If you require assistance with your tax debt or wish to enter into a payment plan, contact our office now.
Written by: Milan Kim