Monday, 1 June 2015

EXCLUSIVE: Taxman's May wind-up blitz a record

THE Australian Taxation Office (ATO) issued more wind-up notices in the month of May than in any given month since July 2012, figures obtained exclusively by Sydney Insolvency News (SiN) show.

The ATO numbers - collated from company wind up activity initiated by the offices of state revenue, workers compensation insurers, ASIC, the ATO and non-government sources - show the ATO filed 556 applications to wind-up non-compliant companies last month. From all sources, the number of wind-ups filed in May reached 722, also a record for the period.

                                                     Courtesy Insolvency Notices

According to Insolvency Notices, produced by Jamieson Louttit & Associates, the next busiest month was August 2013, when the ATO issued 361 notices out of a total of 624.

"If you look at the ATO's annual reports and work out the averages, the number of wind-ups the ATO has filed in May 2015 represents more than half the annual average," Louttit said.

The ATO's annual report for the year to June 30, 2014 shows that since 2009/2010 the taxman has initiated wind-up action an average of 1,103 times per annum. That indicates a monthly average of 92 wind-up applications.

"If you look at the red line on the graph, there's been a significant uptrend by the government to push insolvencies," Louttit said.

"There's a positive in this in that if they are cleaning the system out of people who aren't paying their taxes then it gives everyone the ability to do business with someone who is compliant with the laws."

In March 2015, ATO commissioner Chris Jordan flagged the ATO was taking a tougher stance against non-payers. And Louttit said wind-ups by the ATO and other statutory agencies this month could equal May's record number.

"If you look at the statistics for June, the applications to courts already banked up suggest it's probably going to be the same amount," he said. "It's being increased significantly and it's the SMEs being hit."

Louttit said applying to wind-up non-compliant companies generally results in half of those companies being placed into liquidation while the other half finally pay their outstanding bills.

The ATO has begun working harder to recover billions of dollars in taxes SMEs have failed to pay after conciliatory strategies to debt recovery saw tax debt grow, both in terms of total amount owing and the length of time the debt had been outstanding. See: EXCLUSIVE: ATO in debt assault on SMEs

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