How Tax Debts Can Affect Your Credit Rating

If you’re running a small business or self-employed, here’s something important to keep in mind: starting from 1 July, the ATO may start reporting overdue tax debts to credit reporting agencies. This can seriously affect your credit rating—and potentially your ability to get finance.

So, what’s changing?

Under the current rules, the ATO generally doesn’t disclose your tax debt to credit agencies. But if you have $100,000 or more in overdue tax debt that’s been outstanding for over 90 days, and you’re not actively engaging with the ATO, they may now report that debt.

This can include:

• Income tax debts

• PAYG withholding debts

• GST obligations

• Superannuation guarantee charge liabilities

Once reported, this tax debt will show up on your business credit file, which can impact your ability to:

• Secure finance or refinancing

• Lease property or vehicles

• Negotiate supplier credit terms

• Maintain trade insurance

What Can You Do?

The good news is: if you’re communicating with the ATO, this likely won’t affect you. They’ve made it clear that businesses actively working with them (e.g. on a payment plan) won’t be reported.

Here’s what we recommend:

• Review your tax position before 1 July

• Get up to date where possible

• If that’s not realistic, set up a payment plan with the ATO

• Speak to your accountant or bookkeeper early

• If you’re worried about cash flow, talk to a finance broker about short-term solutions

Final Thought

Many business owners don’t realise that tax debt can now be treated the same way as unpaid loans or credit defaults. This new measure is all about transparency—and for businesses with good records, it could help level the playing field. But for others, it's a wake-up call to keep things in order.

If you’re unsure where you stand, or want to explore finance options before anything goes on your credit file, feel free to get in touch. A quick conversation now might save a world of stress later.