Since July 1st, the Australian Tax Office are able to register credit defaults on businesses with an ABN that has tax debts of $10,000.00 or more owing to them for longer than 90 days. This is part of a new Initiative relating to an announcement in January from the Federal Government Mid Year Economic and Fiscal Outlook.
The purpose of this, apart from helping the ATO collect overdue tax debt, is to create more clarity when it comes to companies defaulting on their tax debts. This will be advantageous to companies whom conduct credit checks on prospective clients. This credit default will last for up to 5 years and will be apparent on any credit checks done via an ABN number.
It must be noted that Debts that are in dispute or in a Payment Arrangement will not be reported. The ATO must alert the business that it plans to default in advance giving them time to contact the ATO.
This will no doubt have a great effect on SMEs. Credit Defaults can be placed without commencing litigation, therefore companies will have to be as vigilant as ever.
Contact the ATO on 13 28 61 if you have any further queries or feel free to contact me on 02 9191 4518.
You may have seen the name Equifax come up on Credit reports recently. Equifax purchased VEDA in February 2016 and have since made the transition from naming the credit agency from VEDA to Equifax in March 2017.
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