Business owners may now be at risk of their tax debts being disclosed to credit reporting bureaus when they fail to be paid off.
Credit reporting bureaus, such as Equifax, are the agencies that receive and store information regarding our credit and reliability as borrowers and provide that assessment to potential lenders.
These scores may be negatively impacted when we, for example, default on mortgage payments or forget we signed up for a phone plan at 21 years old and go 17 years without paying it off.
Now, the Treasury Laws Amendment (2019 Tax Integrity and Other Measures No. 1) Act 2019 (Cth) has given the Australian Taxation Office (ATO) the authority to report a business’s outstanding tax debts to such bureaus. There are certain criteria to meet, however, including the debt being over 90 days due and exceeding $100,000.
Credit defaults are sometimes referred to as black marks on a persons’ history, which can negatively impact their borrowing power for years, especially during the current demands being exasperated by the COVID-19 pandemic.
On the other hand, some observers are claiming these new measures, which effectively relax privacy regulations, will serve as a positive reinforcement for businesses to keep on top of their debt, citing that in a small business where tax debt does not influence day to day cash flow, it can easily slip to the bottom of the pile.
What does this mean?
Credit reporting bureaus, such as Equifax, are the agencies that receive and store information regarding our credit and reliability as borrowers and provide that assessment to potential lenders.
These scores may be negatively impacted when we, for example, default on mortgage payments or forget we signed up for a phone plan at 21 years old and go 17 years without paying it off.
Now, the Treasury Laws Amendment (2019 Tax Integrity and Other Measures No. 1) Act 2019 (Cth) has given the Australian Taxation Office (ATO) the authority to report a business’s outstanding tax debts to such bureaus. There are certain criteria to meet, however, including the debt being over 90 days due and exceeding $100,000.
Credit defaults are sometimes referred to as black marks on a persons’ history, which can negatively impact their borrowing power for years, especially during the current demands being exasperated by the COVID-19 pandemic.
On the other hand, some observers are claiming these new measures, which effectively relax privacy regulations, will serve as a positive reinforcement for businesses to keep on top of their debt, citing that in a small business where tax debt does not influence day to day cash flow, it can easily slip to the bottom of the pile.