ATO Tax Debt warning letter to businesses.

Businesses with over $100,000 in tax debt will begin to receive orange warning letters from the ATO, advising their intent to disclose their tax debt to credit reporting bureaus if they don’t make an effort to manage their debt within 28 days.

The government passed a law in late 2019 to clamp down on businesses with debts of over $100,000 and are at least 90 days overdue.  The ATO did not issue any warnings to businesses in 2020 due to the COVID-19 pandemic but have now begun to implement a “small-scale” program in line with its compliance work as a small but undisclosed number of businesses have now received letters.

The ATO have said, businesses that actively work with the ATO to manage their tax debts, for example, by entering and maintaining a payment plan, will not be reported to credit reporting bureaus.

If you are struggling to pay any tax debt of any amount, please get in touch with us so that we can assist you.  The ATO’s attitude towards this again reinforces that it is better to engage with them rather than ignore!

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