The ATO is now collecting outstanding tax liabilities after placing them on hold. This also brings changes to Director Penalty Notices (DPN).
DPNs are issued when a director is held personally liable for unpaid tax liabilities including superannuation, PAYG and GST.
A non-lockdown DPN will be issued if lodgements were on time but with unpaid liabilities. A lockdown DPN will be issued if lodgements were late.
One implication is that companies are more likely to enter into an insolvency process once they have received a DPN.
Source: Hicksons Insight News
Accounting bodies and leading firms believe that some 10,000 insolvencies, leading to the loss of companies, are a distinct possibility – albeit only potentially so at this moment.
50,000 notices have been issued as a pre-warning, leading to possible action by the ATO. The notices follow the strict collection regime known as the “Director Penalty Notice” where the receipent/s (both past and current directors) must within 21days deal with the tax debt overdue. Options available include voluntary administration, liquidation and small business restructuring (SBR) advice.
A recent court decision means that examination summons may now have expanded usage. The ruling overturned the NSW Court of Appeal’s decision to set aside the summons of a company’s shareholders to a former director. The scope and purposes for which an examination summons can be issued has been expanded by virtue of this ruling. The decision is a boost for shareholder class actions and can potentially increase litigation relating to corporate liquidations.
Depression and anxiety cases have increased among business owners in Australia, owing to the strains brought by COVID uncertainty. Financial and cash flow concerns have been overbearing, along with questions over the wider economic picture. This is especially true in transport, warehousing, retail and hospitality sectors which have been particularly affected.
Small business have the option of applying for the Government backed loan, which now has been extended until March 2022. Our experts can assist with the application process and connect you with the major banks, unless of course your business banker is willing to assist.
