Recently, the Australian Taxation Office (ATO) announced that it would start recording tax debt defaults on the credit files of business owners from 1 July 2017.

Tax debt affects thousands of Australian businesses so this a major change!

At the moment, the ATO will only disclose tax debt information to credit reporting agencies like Equifax (used to be Veda Advantage) in the following circumstances:

• Businesses with Australian Business Numbers (ABNs)
• Businesses with tax debt in excess of $10,000
• The tax debt is at least 90 days overdue and the business hasn’t contacted the ATO to manage the debt from 1 July 2017

Having a tax debt default recorded on your credit can reduce your borrow power or ability to qualify for a home loan in the future.

That’s because the default will be recorded on your credit file for 5 years.

Avoid getting a default recorded and discuss your situation with your accountant so you can maintain communication with the tax office.