ATO criticised for its  ‘firmer’ action against businesses it says owe billions in tax and super - video Dailymotion

ABC NEWS (Australia)

Australian company insolvencies are approaching levels not seen since the global financial crisis. The tax office has been on a blitz chasing billions of unpaid debts. As part of the crackdown, it has targeted some individuals using what are known as Director Penalty Notices, making them personally liable. But it is causing growing distress and calls for the ATO to use more discretion in its tactics.

Transcript

00:00Small business debt helpline, Anna speaking.

00:04Calls from distressed small business owners being chased for old tax debts have hit unprecedented

00:10levels.

00:11Many people are crying.

00:12They don't know what to do.

00:15After giving people leeway during the pandemic, the ATO is taking stronger action to recoup

00:20$34 billion worth of debt it says is owed by small businesses.

00:25In some cases, the money is taken from a person's bank account or directly from their

00:30employer through what's known as a garnishee notice.

00:33It's also slapping tens of thousands of current and former company directors with director

00:38penalty notices, making them liable for unpaid tax and super, with just three weeks to pay

00:45up.

00:46If people do decide to liquidate, then they're in a situation where they've lost their business,

00:49perhaps they're putting employees out of work.

00:53Director Jarvis Archer says this stronger action has pushed the rate of insolvencies

00:57to levels not seen since the global financial crisis.

01:00He says sometimes director penalty notices don't even reach the person they're intended

01:05for.

01:06It's easy to miss a letter if it goes to an address, particularly if they no longer live

01:09at that address.

01:10Counsellors are calling for the ATO to waive debts for people who were made company directors

01:15without their knowledge.

01:17For example, their abusive ex-partner has made them a director.

01:20For the first time they find out that they're a director of this company for which they're

01:23going to be personally liable is when they receive that letter.

01:27The ATO says that in certain circumstances directors may have a valid defence that would

01:32remove their debt or reduce some of the interest charges, but it maintains that firmer action

01:37is needed so that small businesses doing the wrong thing don't get an unfair competitive

01:42advantage.

01:44Having gone from being so lenient to so quickly having a firmer approach, especially in a

01:49time when there is a cost of living crisis, I think it's too soon.

01:53For now, more businesses are expected to go under as the Tax Office continues calling

01:58in debts.

ATO criticised for its ‘firmer’ action against businesses it says owe billions in tax and super

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