For SMEs, cash flow is one of the biggest challenges. So when it comes time to meeting tax payment obligations, many businesses end up owing money to the ATO. The tax debt owed to the ATO represents 63 per cent of all tax debt, which was around $13 billion in June 2018. In the 2017-2018 financial year, small businesses had 800,000 of the 1.1 million tax debt payment plans with the ATO.
In 2017, the Federal Government announced that the ATO could report outstanding business tax debts to the credit reporting agencies. This meant that businesses with outstanding tax debt could be negatively affected when seeking business finance or trade credit. Originally, the threshold for reporting was over $10,000 in tax debt that was more than 90 days overdue.
Under proposed rules published by Treasury, business tax debt of $100,000 for more than 90 days would be reported to credit agencies.
Businesses that are in communication with the ATO, with the aim of resolving or managing their tax debt, would be exempt from disclosure, even if they are above the $100,000 threshold. Additionally, businesses disputing their tax debt would also be exempt.
Many Australian businesses have been effectively managing their tax debts. Having a debt arrangement with the ATO doesn’t mean a business isn’t successful or doesn’t have growth potential.
Many Australian businesses have been effectively managing their tax debts. Having a debt arrangement with the ATO doesn’t mean a business isn’t successful or doesn’t have growth potential.
According to Moula CEO Aris Allegos, businesses will likely seek finance alternatives if the proposed reforms are put into effect, to avoid damaging their credit scores.
According to Moula CEO Aris Allegos, businesses will likely seek finance alternatives if the proposed reforms are put into effect, to avoid damaging their credit scores.
Get exclusive access to innovation, knowledge and methodologies for business and technology.
We build exceptional software applications from our development studio, and we take our work seriously. Your success is our business, but we can't make that happen until we hear from you.
Make It Happen
TechDilation Pty Ltd (ABN: 75 641 747 793) is a complete Techno-Digital company and offer end to end development of Mobile and Web Applications including IOT enabled security products, Taxi Booking, e-Commerce, Enterprise Apps, Laundry, Hotel & Flight booking, Healthcare, Liquor e-commerce portal, Video content manager, Custom Apps. We strives to go beyond the client expectations by bringing together a unique combination of talent, innovative thought process, design thinking and state of art technologies.
Copyright © 2012-2024 TechDilation Pty Ltd. ABN 75 641 747 793.
All Rights Reserved.
