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CreditorWatch now collecting ATO tax debt default data

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Would you like to know if your customers have a large debt with the ATO?

CreditorWatch is currently the only credit bureau in Australia reporting on this information.

The ATO is Australia’s largest creditor responsible for the largest number of company windups in 2019. Historically, businesses would take on debtors with undisclosed tax debts and be caught off guard when the first mention on financial instability appearing when the ATO began wind up procedures.

With the new legislation now in effect, creditors will have additional security and transparency when managing their customers. For over five years, CreditorWatch has been lobbying and working with the ATO on getting business ATO Tax Defaults to be made public. Legislation was eventually passed in 2019, known as ‘Disclosure of Business tax debts’ (formerly ‘Transparency of tax debt’).

The ATO will send us records of business tax debts under the following criteria:

  • The entity has an ABN
  • It has one or more tax debts and at least $100,000 is overdue by more than 90 days
  • It is not engaging with the ATO to manage the tax debt
  • It doesn’t have an active complaint with the Inspector-General of Taxation Ombudsman (IGTO).

CreditorWatch has been integrating this ATO data into its suite of credit reporting and monitoring tools, including our new RiskScore, and it is now LIVE! The data is included free of charge in all subscriptions. This means that all credit reports will contain ATO tax defaults and our alerts will notify you when a tax default is registered against one of your customers. Our database of tax default records from the ATO will build gradually across 2022 as defaults rise in this challenging and uncertain trading environment.

This is critical information when assessing the credit risk of a new customer and managing existing customers. The data is a game changer, and as the ATO begins to ramp up its pursuit of overdue company tax debts as we leave COVID behind, it will become even more important.

CreditorWatch CEO Patrick Coghlan says:

“We are extremely proud to be the first credit bureau in Australia to provide ATO tax debt default data to our customers. This is a game changer in terms of giving our customers greater transparency and a more holistic view of a company’s level of credit risk. The ATO data points have been integrated with our new RiskScore product, so they are now included in our company credit ratings and reports.”

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