The ATO is showing no signs of easing up on its crackdown on companies owing money and pushing them into insolvency if required, with one mid-tier firm citing a recent spike in insolvencies

" />
  • I've just started up my own business as a sole trader: what do I need to know about tax?

    Starting up as a sole trader changes the way you report income and pay your taxes. We can make sure that you're ready for the transition, no matter which industry you're from.

    Book a consultation
  • Need accounting software advice and support?

    Our extensive expertise in all aspects of accounting software means you can concentrate on what you do best – running your business. We are accredited Xero specialists and have been MYOB, Intuit and Reckon Partners for many years.

    Learn more about Our Services
  • We want to start our own business: how do we set up the company?

    At PBA Financial Group we specialise in the setting up of start-up and new businesses. We'll set up a solid foundation for your new business so that you can hit the ground running!

    Learn more about Our Services
  • I've always done my own tax returns without the help of an accountant

    More often than not, people who do their own tax returns will miss out on valuable deductions simply because they didn't know what they were entitled to claim, or they incorrectly claim expenses.

    Are you sure your tax return is as accurate as it could be?

    Book an appointment

Latest News

ATO on 'aggressive' debt recovery hunt

The ATO is showing no signs of easing up on its crackdown on companies owing money and pushing them into insolvency if required, with one mid-tier firm citing a recent spike in insolvencies

 

 

Last week, solvency and forensic accounting firm Worrells released The Worrells Insolvency Report 2015-16. 

Looking back over the last 10 years, the report showed that the total number of insolvencies in Australia spiked in 2008-09 as a result of the GFC. After remaining steadily high through to 2012-13, the number of insolvencies dropped in 2014-15.

Now, interestingly, the numbers are beginning to spike again, and this is because of the ATO’s crackdown on debt according to Worrells partner Chris Cook.

“There are businesses out there that, if left to their own devices, just sit there in no man’s land with debt owing. So there are businesses, as unfortunate as it is, that sometimes need to look at liquidation as an alternative,” Mr Cook told Accountants Daily.

“The ATO is certainly a lot more aggressive than they used to be, they're a more active debt collector than they used to be. I don't see that necessarily as a bad thing, as long as they are compassionate to the businesses.”

The report showed that the number of applications the ATO lodged with the Federal Court of Australia to wind up a company increased dramatically in May 2015, signalling the beginning of their crackdown.

“The number goes up from April to May [2015] from around 100 up to about 550,” Mr Cook said.

“From there it stays fairly high for six months, then it goes up and down a little bit, and then in June last year, which is where our data finishes for the purposes of this report, it finishes at about 300.”

While the data from June 2016 isn’t available yet, Mr Cook said that the ATO is far from done with its crackdown.

“The ATO is not slowing down at this stage and to be fair, sometimes that needs to happen,” he said.

“I don’t think this is a short term thing. I think the ATO is going to continue with this aggressive debt collection campaign, and I don’t believe that's a bad thing, as long as it’s done properly.”

 

LARA BULLOCK
Wednesday, 22 March 2017
www.accountantsdaily.com.au

April - June 2017 Archive