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Tax debt will impact your credit rating Posted on September 10, 2021
Earlier this year, the Morrison government passed a new set of laws empowering the ATO to report business tax debts of more than $100,000 that are over 90 days late to credit reporting firms. This will impact a debt holder’s ability to get credit or finance on both a business and a personal perspective.
This is one way that the ATO plans to narrow Australia’s small business tax gap of more than $11 billion.
It’s important that businesses don’t get into tax debt in the first place. Any debt needs to be carefully managed and communicated with the ATO. That being said, cashflow issues are a common symptom of the COVID pandemic and sometimes there just isn’t the cash to pay large sums of money.
We encourage you to engage an accountant for professional support to recover your cashflow, manage the ATO and any debts you may be accumulating, and help to create a financial structure to protect your business.
Tax debts are also a popular theme for scammers so it is really important to be vigilant on the topic. If you’re unsure about a tax debt, you can call 1800 008 540 or your accountant to manage the payment: [email protected]