ATO Unpaid Debts

Australian Taxation Office (ATO) have been getting tougher and taking stronger measures when a taxpayer repeatedly defaults on the ATO payment arrangement plans.
ATO stronger action may include

Garnishee notices
Garnishee notice is issued to make sure that the payment of any funds will directly come to ATO to offset your debt. This notice can be issued to your employer, financial institutions and your debtors.


Director penalty notice
Company director has a legal responsibility to meet with the company arrangement with pay as you go (PAYG) and superannuation guarantee charge (SGC). If the director fails to pay above listed liabilities on time then they can become personally liable for the penalty, which is equal to the unpaid amount.

This notice is issued to start legal proceeding from ATO.

Legal action
ATO can take number of legal action to recover his debt. Listed below are the few legal actions that ATO may take.

Claim/Summons
If you don’t pay your debts on time, then ATO may file a claim/summon in relevant court. One court has decided debt is owed; court may look of number of option for recovery. One of the options is bankruptcy.

Bankruptcy notice
Bankruptcy notice obliges you to pay your debt or make payment agreement in 21 days after the notice. If you are unable to pay your debt then a bankruptcy will file. It is legal declaration that you would not be able to pay the debt. Once, a person is declared bankrupt, all his assets sold to pay the debts.

Creditor’s petition
It is an application to declare someone a bankrupt.

Statutory demand
ATO can issue a statutory demand-asking payer to pay the debt on next 21 days. If the debt remains unpaid then ATO has a right to file an application with federal court to wind up the company.

Wind-up action
If the court approves the wind-up action then an official liquidator will be appointed to sell the company assets to pay off the owed debts.

Contact us today on 1300 300 106 if you need help sorting out your debt with the tax office or for further information about our Cranbourne Accountant and Cranbourne Tax Agent Services.

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