Marino Law | Gold Coast Law Firm

ATO to take further action on debt collection

The Australian Tax Office has announced that whilst it remains committed to engaging with taxpayers about unpaid debts as the economy emerges from the COVID-19 pandemic, where taxpayers don’t engage the Australian Tax Office, it is taking firmer actions.

Such firmer action includes the issuance of 30 to 40 Director Penalty Notices each day, and the Australian Tax Office expects these numbers to increase.

The Australian Tax Office’s Deputy Commissioner Vivek Chaudhary has confirmed that:

  • it is critical that the taxpayers speak with the Australian Tax Office to avoid it taking firmer action;
  • to non – responsive taxpayers, the Australian Tax Office has issued 29,552 awareness letters for disclosure of business tax debts and 52,319 awareness letters about the use of Director Penalty Notices; and
  • it expects a number of companies to be wound up in insolvency over the coming months.

The full media release can be found here.

The Australian Tax Office appears to be continuing to be willing to negotiate and enter into payment arrangements with taxpayers, such as a long – term payment plans, provided that the taxpayer continually engages with them.

If you are, or know someone who is, a director of a company, and the demands of the Australian Tax Office have been ignored, now may be the time to take some positive action.

The most prudent course of action would be to consult with a solicitor and financial advisors to conduct a thorough review of the affairs of the company, and prepare a strategy to attempt to salvage the situation and avoid further increases of liabilities.

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