ATO Line of credit ending
As new reporting powers come into play, businesses are being warned against using the ATO as an alternative line of credit.
Debt Reporting Powers
In 2019, the ATO was afforded new debt reporting powers. While this took a backseat to the Covid-19 pandemic, the ATO is now cracking down on outstanding tax debt.
Businesses without a payment plan, that are more than 90 days in arrears, and who owe more than $100,000 in tax are more likely to be reported to credit agencies by the ATO.
Impact on credit rating
In the past, business owners have sometimes used the ATO like a ‘line of credit’ by not paying their ATO commitments on time.
Taking this road is much more likely to have an adverse impact on your credit ratings and credit insurance limits. This, in turn, makes it more difficult to maintain or extend credit terms with suppliers.
Therefore, it's important to maintain a high level of communication with your creditors.
Staying on the front foot
As business owners, if you owe tax, it's vital that you stay on the front foot with this ATO crackdown. We suggest you seek the advice of your BAS agent.
First Class Accounts Ovens and Murray, as your BAS Agent, are able to advocate on your behalf to deal with the ATO.
As Busy01 Consulting, we can also to assist with:
- preparing a business plan
- management advice
- cash-flow planning and projection
- systems development
- business expansion
- budget development
- trading-structure planning.