From July this year, it will enable the ATO to pass on to credit agencies the debt details of SMEs with tax debts that are more than 90 days overdue, that are not in dispute and where a payment plan has not already been established with the ATO.
This change will make it very difficult for those businesses to access credit and could even bankrupt some of them.
So what should small businesses do?
The ATO is offering a lifeline though for small businesses that fall into this category. If they contact the ATO before the end of June and organise a payment plan, they will not be named. The ATO’s aim is to help SMEs in debt before they become bankrupt, according to Deputy Debt Commissioner Robert Ravanello.“The disclosure is at the discretion of the ATO so it’s not automatic,” he said. “We will try to work with businesses before we disclose. We’ll contact them, try to engage them
“The disclosure is at the discretion of the ATO so it’s not automatic,” he said. “We will try to work with businesses before we disclose. We’ll contact them, try to engage them to deal with their debt, but if they don’t then we’ll disclose.”
Why is this happening?
Mr Ravanello said the move is also about protecting other small businesses. “If there are other businesses out there wanting to trade with a business that isn’t working with the ATO and has a large debt then if that’s not disclosed, they can start trading with the business only to find out that we may make them insolvent later,” he said. Mr Ravanello urged small businesses with tax debts to contact the ATO as soon as possible. “What we’re trying to do here is we want the businesses to engage with us … because those that do contact us we’ll support them,” he said. Businesses will be notified by the ATO before their details are passed on to credit agencies.
Want to find out the secret to small business success? Tune into #BizSecretsSBS at Sundays 5pm on SBS, stream on SBS Demand, or follow us on Facebook, Twitter or Instagram.
