VEDA is the largest credit reference agency in Australia to report and view individuals and businesses credit history. It is used almost universally by banks to sight and score applicants credit worthiness.
The government has approved the Australian Tax Office (ATO) to lodge information on businesses who owe tax arrears to VEDA under what is called the ‘Tax debt transparency measure’ from 1 July 2017.
They believe the measure will encourage businesses to repay tax arrears which are currently about $19 billion; 70% of which was made up of small to medium businesses.
Debts will only be reported where:
- The debt is for a taxpayer that has an ABN
- The debt amount is over $10,000 and unpaid for over 90 days
- The debt is not in dispute
- No payment plan has been established or an existing payment plan has defaulted.
The ATO will notify a business when it intends to refer the tax debt to VEDA.
The measure does not oblige the ATO to disclose this information; it will be done case by case.
Having unpaid debts on a credit record can make things difficult for future finance and supplier credit applications. It’s worth having the conversation with us to seek an arrangement with the ATO if you think you could be potentially impacted.