We’ve made changes to how we share information about unpaid tax (credit reporting) to a credit agency.
Credit reporting was introduced in 2017 to encourage tax compliance and improve the visibility of significant tax debt. We share information about unpaid tax with 1 approved credit reporting agency, Centrix. This affects a business’s credit rating.
To credit report a business, the following criteria must be met.
- The debt is over $150,000 or has been unpaid for a year and equals 30% or more of the company’s assessable income.
- We’ve made 'reasonable efforts' to collect the debt.
- The business was 'formally notified' 30 days before it was credit reported.
What’s changing
From 13 October, we’re running a pilot where selected businesses will be formally notified of their outstanding debt. If they do not take positive action - such as setting up an instalment arrangement - they will be credit reported.
Businesses will have 30 days to respond before any credit reporting takes place.
The formal notification (Notice of Intent) will appear in the company’s myIR account on the day that the notification is couriered to the company’s registered office. The 30-day response period starts from the date the notification is delivered to the registered office.
'Reasonable efforts' now include us sending our standard overdue reminders and options for repayment, but the business has not yet engaged with us.
'Formal notification' to the company is now sufficient - not all individual directors will be notified.