Owing the ATO Can Now Show Up on Your Credit File. Here’s How to Stay Off the List.

For most of Australian business history, a tax debt was a private matter between you and the ATO. That era is over. Under the disclosure of business tax debts measure, the ATO can report eligible overdue tax debts to credit reporting bureaus — where they appear on the commercial credit files that banks, equipment financiers, trade suppliers and insurers check before saying yes to anything. In the 2023–24 financial year alone, tens of thousands of business tax debts were disclosed.

A disclosure works like a default against your business’s name: it can tighten trade terms, stall equipment finance applications, and raise the cost of everything — exactly when cash flow is already under pressure. The good news is that the rules are precise, the warning is formal, and the exit stays open the whole way through. Here is exactly how it works, and how businesses take back control before it happens.

The exact test the ATO applies

The ATO may report your business tax debt information to credit reporting bureaus only if all of the following apply:

• Your business has an ABN and is not an excluded entity (such as a registered charity, complying super fund or government entity).
• You have one or more tax debts and at least $100,000 is overdue by more than 90 days. Balances are considered together — income tax, activity statement and other accounts can cross the threshold combined.
• You are not effectively engaging with the ATO to manage the debt.
• You don’t have an active complaint with the Tax Ombudsman about the proposed disclosure.

How it unfolds

The way out stays open the whole time

Engagement is the reliable exit. A payment plan you can actually keep to takes disclosure off the table and keeps it off. But a payment plan alone doesn’t always fix the underlying squeeze: it sits on top of your existing commitments, and since 1 July 2025 the general interest charge on late tax is no longer tax deductible — so an unresolved balance quietly costs more than it used to.

Taking back control of the cash flow

This is where many businesses look at restructuring the position rather than just scheduling it. Depending on your situation, options that lenders on a broker panel may consider include:

• Refinancing against equity in assets you already own — vehicles, machinery and equipment can secure a facility used to clear or reduce the ATO balance, converting an overdue lump the ATO is chasing into a scheduled commitment you chose.
• Consolidating expensive short-term debt into one structured repayment that matches your cash cycle.
• Freeing working capital through structures like sale-and-leaseback on existing equipment, so the business keeps the gear and regains breathing room.

Two honest caveats. Not every lender will touch ATO debt — but specialist lenders do consider it, and a broker’s job is knowing which ones. And your position is always stronger with lodgments up to date and evidence that you’re engaging with the ATO — lenders read engagement the same way the ATO does.

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This article is general information only — it doesn’t consider your objectives, financial situation or needs, and it isn’t tax, legal or financial advice. Disclosure criteria and tax rules can change; check current guidance on ato.gov.au or speak with a registered tax agent about your circumstances.