Latest News
Hot Issues
A 2022 Advent Calendar for our clients
Difference Between Leasing vs Hire Purchase
How Have Australians Reacted to Interest Rate Hikes?
FBT – Christmas Parties and Taxi Fare/Rideshare
Employee Christmas Parties and Gifts – Any FBT?
Big-end-of-town tax: miners, banks pay up, but for one-third it’s zip
Cash flow forecasting template
Buyback law closes loophole ‘but franking credits here to stay’
Budget October 2022-23-Comprehensive summary
Federal budget 2022 -- Winners and Loser
Federal Budget 2022/23 - Documents and Facts Sheets
Budget: all the key points you need to know
Sole traders cut back super, work longer hours
Small business debt and tax gap at top of ATO hit list
Christmas ‘crunch time for economy, inflation outlook’
What business needs to know about the skills and technology boosts
SMSF scam investigation sees call centre raided
How to avoid personal liability when dealing with DPNs
The Countries that Consume the Most Beer in the World
ATO’s interest charges hit highest level in seven years
Australian Taxation Office warns against asset wash sales
Take action on valuations now to avoid delays, says ATO
Australian Taxation Office-(ATO) reminder to small businesses this tax time
Why you need a contract of employment
Tax benefits for unused “carry forward” concessional superannuation contributions
Cyber security and work-from-home become key executive concerns
Largest wind power producers in the world
Chalmers revives 120% deductions for spending on skills, digital
What is Single Touch Payroll Phase 2?
Australian Taxation Office (ATO) reminder to small businesses this tax time
Articles archive
Quarter 3 July - September 2022
Quarter 2 April - June 2022
Quarter 1 January - March 2022
Quarter 4 October - December 2021
Quarter 3 July - September 2021
Quarter 2 April - June 2021
Quarter 1 January - March 2021
Quarter 4 October - December 2020
Quarter 3 July - September 2020
Quarter 2 April - June 2020
Quarter 1 January - March 2020
Quarter 4 October - December 2019
Quarter 3 July - September 2019
Quarter 2 April - June 2019
Quarter 1 January - March 2019
Quarter 4 October - December 2018
Quarter 3 July - September 2018
Quarter 2 April - June 2018
Quarter 1 January - March 2018
Quarter 4 October - December 2017
Quarter 3 July - September 2017
Quarter 2 April - June 2017
Quarter 1 January - March 2017
Quarter 4 October - December 2016
Quarter 3 July - September 2016
Quarter 2 April - June 2016
Quarter 1 January - March 2016
Quarter 4 October - December 2015
Quarter 3 July - September 2015
Quarter 2 April - June 2015
Quarter 1 January - March 2015
Quarter 4 October - December 2014
ATO adds indebted sole traders to credit referrals

The step should help promote transparency and fairness, says IPA. The ATO has begun disclosing tax debts of sole traders to credit reporting bureaus (CRBs) if they meet its criteria for referral.


General manager of technical policy at the IPA, Tony Greco, said the move could provide a more even playing field for businesses.

“There are pluses and minuses, the pluses are it makes it more transparent that the market and all credit providers, including trade credit, get to see what level of debt the business has and it provides an extra impetus to that client to engage with the tax office,” said Mr Greco.

“If you’ve got one business compliant and another not compliant then that’s an unfair advantage, so it promotes fairness in the tax system.”

The change applies only to sole traders with ATO debts that meet certain criteria.

“The rules are currently that it has to be over $100,000 and has to be related to a business debt and it also has to be when the business is basically not responding to current attempts to put it on the payment plan or to pay it,” said Mr Greco.

The ATO said that a business or sole trader effectively engaging with it would not be subject to CRB referral, even if the debt exceeded $100,000.

The ATO said effective engagement involved having:

  • A payment plan and complying with the terms of the arrangement
  • An application for release from the tax debt
  • An active objection against a tax decision to which the debt related
  • An active review with the AAT or an active appeal to the court
  • An active review with the AAT of a reviewable decision that might affect the amount of a non-complying superannuation fund’s tax debt with the relevant regulator
  • An active complaint with the IGTO in relation to the tax debt.

Mr Greco said the ATO used the ability to disclose tax debt information to CRBs as a tool to influence businesses to take their debt seriously. 

“A lot of businesses treat the ATO as the lender of last resort so just don’t pay it,” he said. “When money becomes tight businesses just stop paying one of their creditors, and the easiest one is the ATO.

“A credit rating is very important if you are highly leveraged, therefore this ability to provide this information so all can see is the thing that sometimes gets people to take note of the debt because it starts to impact their ability to finance their operations.”

Mr Greco said the IPA wanted to see the ATO customise its approach for each business.

“Tax debts are a big problem and it has blown out for a good reason, the tax office was giving businesses a bit more leeway during COVID which was understandable,” he said.

“We’ve always asked for a tailored approach so if a business has been caught up in negative COVID scenarios then they [the ATO] should go soft, but if other businesses have thrived during COVID the tax office should go hard.”

Before disclosing a tax debt to CRBs, the ATO said it would send a written notice to the business that included steps that could be taken to avoid the information from being reported.



Josh Needs
19 July 2022

Privacy Policy | Disclaimer