SMEs using the ATO like a “bank” – what your clients need to know

Man going over documents

As of the February 21 2020, the ATO will disclose tax debts over $100,000 that are overdue by more than 90 days to Credit Reporting Bureaus (CRB).

Business owners historically have used the ATO as a “bank” by not paying their tax commitments on time, rather than utilise their own capital or commercial working capital products to help with their cash flow needs.

If reported to a CRB, this can affect their credit score through comprehensive reporting changes and restrict their ability to access credit.

As per the ATO “Disclosure of business tax debts” reference material, the ATO will only disclose tax debt information of a business to a CRB if the business meets all of the criteria outlined on their site. Read more here.

To help business owners combat this, start by understanding their cash flow needs and if required, help them setup an appropriate working capital facility.

For brokers wanting to learn more about working capital facilities and cash flow products contact your Commercial BDM or our Business Scenario and Platform Support team on 1800 063 210 (opt 3) or business@afgonline.com.au.

RBA cash rate decreased at 0.50%

The cash rate decision for March has been announced by the RBA with a rate cut.

The RBA has reduced the cash rate to a new record low of 0.50% in response to the economic threat posed by the coronavirus outbreak and bushfire crisis.

Whilst the Reserve Bank would have been encouraged by recent economic data confirming continued house price increases and business investment, the dangers to the economy posed by the virus and fires and fears of a recession left the RBA with little option but to reduce rates.

If you’d like to have a chat about what today’s news means for you and your finances, please don’t hesitate to get in touch with an AFG broker.