The Tax Office (ATO) has received significant media attention recently and continues to feature regularly as an applicant in many of the ‘Winding Up’ proceedings before the Courts.  The majority of these proceedings are reflective of an aggressive strategy by the ATO to take strong action to recover outstanding debts.

A recent article by The Sydney Morning Herald mentions that more than half of proceedings initiated to wind up companies are commenced by the ATO.  It also mentions that the aim of this is to increase revenue for the budget, with the majority of ATO actions initiated against companies not paying GST or tax and super on behalf of employees.

Darrell Kake, an Accredited Specialist in Commercial Litigation at Quinn & Scattini, explains his thoughts on the actions by the ATO and what is best to be done.

“Problems with the ATO almost only become a problem if discrepancies are not dealt with promptly and sufficiently.

Every effort should be made to make sure that businesses do not fall behind in payments to the ATO.

A person does not ordinarily require the assistance of a lawyer to negotiate an extension or payment arrangement with the ATO.

If all else fails – call us promptly.  The sooner you act, the sooner you can take steps to restructure affairs to ensure the best possible outcome for your business.

If you wait too long some options may not be available to you – and that can be disastrous for your business.”

Some struggling businesses may find that paying ATO debts in full may not be possible due to temporary cash flow difficulties.  Accordingly, the advice of Darrell to negotiate an extension or payment arrangement is highly beneficial.