It is best for company directors to be proactive in their dealings with the ATO. This will often mean contacting the ATO or engaging a third party to contact the ATO to negotiate a payment arrangement if the company has fallen behind in required tax payments. If there is no communication with the ATO, the ATO will take recovery action including taking steps to place a company in liquidation.
However, even if the ATO has taken recovery action, there are still options available to the company rather than merely letting ATO appoint a Liquidator. We have negotiated a number of payment arrangements on behalf of a companies even after the ATO has taken steps to place them in liquidation. The negotiation of a payment arrangement is more diﬀicult in these circumstances but it is not impossible.
Here are some of the arrangements we have helped put in place:
- A large transport company owed over half a million dollars dollars to the ATO and had defaulted on eight prior payment arrangements. The ATO was taking steps to put the company in liquidation. We reviewed the company’s circumstances with its directors and accountant and advised that if the ATO placed the company in liquidation this would result in the directors going bankrupt as they had guaranteed debts owed to a number of financiers and other creditors. The directors engaged us to put another proposal for a payment arrangement to the ATO, arranging to pay the company’s debt over two years, providing the ATO wrote off the interest and penalties it had charged. After further negotiations with the ATO, the payment arrangement was accepted and the company avoided liquidation.
- The director of a company was referred to us by his accountant regarding a retail business the company traded. The company owed several hundred thousand dollars to the ATO and the ATO had issued the company with a statutory demand and refused a payment arrangement request by the company’s accountant to pay its outstanding debt by monthly instalments. We put a similar proposal to the ATO as well as providing the ATO with details of the steps the company had taken to improve its profitability and notifying the ATO that if the company was placed in liquidation they would receive little or nothing. The ATO agreed to the payment arrangement, including agreeing to withdraw the statutory demand it had issued and write oﬀ some of the interest it had charged.