Negotiating with the ATO is very difficult
The ATO is a major creditor of many businesses throughout Australia. This has, over the past couple of years, resulted in serious consequences for many business owners. In fact, the ATO in 2019 was responsible for the increase in companies being wound up at record levels and the massive increase in individuals being bankrupted:
- Claiming general interest charge and penalties, increase a company’s inter graded tax debts.
- If a director fails to pay Superannuation payments, then he can expect the ATO to issue a Director’s Penalty Notices, simply because the Superannuation debt is, and has always been, personal to the Director;
- The ATO also have the ability to Garnishee income from a company and or personal bank(s). The ATO also have the ability to make contact with your debtors and instruct them to pay funds owing to you or payable to the company to, upon receiving the notice, redirect those payments to the ATO.
- Once the ATO make contact with banks or your debtors be assured the next step is to commence legal action to wind-up the company and or bankrupt you.
As stated throughout our website, communicating with creditors and keeping them updated about your financial position will minimise the risk of them proceeding with recovery action. Turnaround is often called restructuring; however, we don’t like that word as it infers you’re going to be changing your structure and what creditors are familiar with. Where the word turnaround infers just that I am going to turn things around given the opportunity. A proactive director is one that steps up to the plate when things are tough and doesn’t ignore creditor calls or correspondence and never trades while insolvent.