What to do if the ATO notifies you of a tax debt

Small business owners with a business tax debt are encouraged to work with the Australian Taxation Office (ATO) to help manage it.

Dealing with financial stress while running a business can be difficult. It is often tempting to brush it aside and deal with it at a later stage, or panic and try to resolve your debt through a short-term solution. However, there are a variety of tailored resources available to help you manage your tax debt without resorting to extreme measures.

What is the Disclosure of Business Tax Debts program?

As part of the Disclosure of Business Tax Debts program, the ATO has written to taxpayers that meet the criteria to have their tax debts disclosed to credit reporting bureaus (CRBs). The ATO has identified small businesses including sole traders with large outstanding debts as part of this process.

The aim of the Disclosure of Business Tax Debts program is to address the unfair advantage gained by businesses who are not meeting their tax payment obligations. If you receive a letter and do not engage with the ATO to manage your debt, you may receive another letter telling you that your debt has been disclosed to CRBs. To avoid this, it is important that you work with the ATO and negotiate a mutually acceptable plan to avoid your debt information being disclosed.

https://www.smallbusiness.wa.gov.au/blog/what-do-if-ato-notifies-you-tax-debt