ATO Urges Timely Debts Settlement

The Australian Taxation Office (ATO) has issued a reminder to businesses regarding their tax and superannuation obligations. To avoid having their debts reported to credit agencies, businesses must either pay their tax debts or actively communicate with the ATO.

Starting from July 2023, as part of returning to regular debt collection, the ATO has notified over 22,000 businesses with tax debts exceeding $100,000 overdue by more than 90 days, intending to disclose their debts. More than 9,000 businesses are anticipated to have their debts disclosed this month.

Jillian Kitto, ATO Assistant Commissioner, emphasized that paying or engaging with the ATO is crucial to prevent a business’s tax debt from impacting their credit rating. She encouraged businesses with outstanding obligation to reach out to the ATO promptly.

Kitto also noted that businesses must settle their debt or establish a suitable payment plan within 28 days of receiving the intent to disclose notice to avoid disclosure. Revealed debts can affect a business’s financing prospects and supplier relationships.

The ATO foresees issuing over 50,000 intent-to-disclose notices in the 2023–24 financial year. Kitto stressed the importance of reinstating a timely tax payment culture after the focus on stimulus payments during the pandemic. She highlighted that more than $5 billion is owed by businesses meeting the disclosure criteria, emphasizing the need to protect the community and other creditors while promoting fair treatment for compliant businesses.

Kitto concluded by urging businesses with outstanding tax debts to promptly pay them or seek assistance from the ATO or their tax professionals for appropriate support.

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