Unpaid tax debt is the most common reason for a company to enter liquidation. Most directors are aware that the ATO has a range of strong enforcement actions it can use in pursuing debts from companies: Director Penalty Notices; Garnishee Notices; Demands and Wind-up Petitions. What the ATO doesn’t publish is the order and timing of those actions. At Dissolve we receive calls from directors and their advisers every day so we get to see on-the-ground what actions the ATO takes and when.
The actions we see the ATO taking can vary quite a lot and the promptness and aggressiveness of the actions seem to relate to whether the ATO officer perceives the debtor company as being cooperative or not. So the following information should only be regarded as a guide, as it has been compiled from anecdotal evidence we have collected over the years.
So, here are some general principles on what a taxpayer (by which we mean a small to medium sized company) can expect:
So it can be a slow process but the message for directors is that they need to deal with the problem. Whereas a small trade creditor is likely to be aggressive initially and possibly then lose enthusiasm, the ATO will be somewhat understanding initially, a little slow to act, but in the end, relentless.
If the above advice has not answered your questions you might want to review the following pages and downloadable Information Sheets:
Or please call us for free advice.
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