As we predicted after the stimulus now comes the collection measures, new ATO powers to hurt those that show no intention of repaying their debts over $100K.
Whilst this may be a prudent collection step at this present time the COVID crisis and lockdown are showing no end in sight so the question is whether now is the right time to start this stance. It seems that the government recently rained money loosely upon us with poor regulation and qualification and now wants it back, understandably.
- The ATO has begun utilising new powers that will allow it to disclose business tax debts to credit reporting bureaus
- Businesses with over $100,000 in tax debts have begun receiving letters from the Tax Office, warning them of the agency’s intent to disclose tax debt information to credit reporting bureaus if they do not make an effort to manage their debts within 28 days.
- The ATO advised that the orange-coloured warning letters are the first time the agency has sought to use its new powers since the law was passed over 18 months ago.
Here is what you need to know:
- “The ATO has contacted a small number of businesses that met the reporting criteria, requesting they take action to pay their debt or set up a payment plan and advising them that their tax debt may be reported if there continues to be no engagement,” ATO spokesperson.
- “Businesses that are actively working with the ATO to manage their tax debt will not be reported to credit reporting bureaus.”
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