The ATO has announced that from 1 July 2017 it will notify Credit Rating Bureaus about businesses that have not "effectively engaged" with it about their tax debts.

Initially the measure will only apply to businesses with Australian Business Numbers and tax debts over $10,000 that are at least 90 days overdue.

Measures to delay such notifications include entering into formal payment arrangements for debts greater than $10,000 or simply communication with the ATO as to cash flow concerns and informal debt repayment correspondence.

The ATO has adjusted its stance, and arguably its standing on privacy, in an effort to prompt company directors to better manage their company tax obligations and put a halt on Australian Businesses using the Crown as a financing option.

Currently Australian Businesses and taxpayers pay a General Interest Charge of 9.01% per annum for outstanding debts with the ATO, inclusive of all taxes (GST, Income Tax & PAYG Withholding). Although this is a severe interest amount, many businesses are forced to pay the interest charge due to cash flow issues, poor debtor management or financial mismanagement.

If your company currently has tax debts of greater than $10,000 with the ATO for 3 months or greater, contact your GMD team member to discuss your options prior to the ATO reporting your company to the Credit Rating Bureaus.