Beware: Credit Score Hazard
Up until now, the credit reports of small businesses have not included tax debts, but that’s about to change.
Under new laws the tax office is entitled to to inform credit reporting agencies if business owners don’t pay their taxes on time.
You are in the gun sights if your business owes more than $100,000 to the ATO or is more than 90 days in arrears without a payment plan in place.
That presents a severe hazard to your capacity to borrow for your business and will certainly effect the rates you pay.
It could hamper your credit insurance limits and discourage suppliers from extending credit.
Business lender Scottish Pacific’s recent SME Growth Index has found that just over a quarter of small businesses deliberately delay paying tax to preserve their cash flow.
Senior executive, Wayne Smith warns that the new laws are a clear message that the ATO should not be regarded as a de facto bank.