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Businesses ghosting the ATO targeted in debt collection blitz

Businesses ghosting the ATO targeted in debt collection blitz

Clients failing to engage must “act now” or face rapid escalation of enforcement action, the Tax Office has warned agents.

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The Tax Office has run out of patience with businesses that repeatedly ignore payment reminders, vowing to pursue them with aggressive enforcement measures in a new approach to debt collection.

Issuing a warning to tax agents on Wednesday, the ATO said business clients that refused to engage or company directors with multiple debts needed to “act now” or face swift penalties.

“We're changing our approach to collecting unpaid tax and super,” the ATO said.

 

“We are now focusing on businesses who refuse to engage with us and continue to ignore our SMS and letter reminders.”

“This approach may impact some of your business clients who have not responded to our past engagement attempts.”

For those that failed to engage or set up payment plans for unpaid GST, pay-as-you-go (PAYG) withholding or employee super, the ATO would rapidly escalate to director penalty notices (DPNs) and garnishee orders regardless of a business’s size.

Directors of multiple companies who allowed tax and super to go unpaid and likewise failed to engage with the ATO “can expect us to look at their debts more holistically”.

“These directors can expect to receive DPNs capturing the total value of these amounts across all related entities,” the ATO said.

“If these directors don’t take action, we can recover these amounts directly from them, putting their assets at risk.”

The step-up in enforcement action comes at a time when DPNs are at historically high levels, with 26,702 notices worth $4.4 billion issued last year.

It is a 50 per cent jump from the 2022–23 income year which saw 17,459 DPNs issued for $2.87 billion in debts.

Experts have told Accountants Daily that DPNs have become increasingly common as the ATO pursues its book of collectable debt, which ballooned from $26.4 billion in 2019 to over $50 billion after the COVID-19 pandemic.

The ATO said its new focus on unresponsive taxpayers was a “deliberate and targeted approach” to level the playing field for businesses that did the right thing.

“As we change our approach to collecting unpaid tax and super, we’re making it fairer for compliant businesses that do the right thing and fulfil their tax obligations,” it said.

“Not paying tax affects everyone, and it’s important we take action to help prevent businesses from putting other small businesses and employees at risk.”

It urged practitioners to assist it in its recovery efforts, encouraging clients to pay on time or set up payment plans before enforcement actions began.

“The key message we would like to ask you to pass onto your clients is, if they can pay, please do and if they need more time to pay, don’t ignore it – act now to check if you can put in place a payment plan online or reach out to us early for help.”

“If your clients are experiencing genuine financial hardship, additional options are available, including deferring payment due dates, interest remissions and access to compassionate release of their super.”

 

 

 

Christine Chen
25 October 2024 
accountantsdaily.com.au

Mario Chiodo

Mario Chiodo (CPA)

Having a wealth of knowledge and experience in public practice, before founding his own firm in 1985, Mario is a seasoned Partner and leader of the CP Partners team. Mario’s role over the years has been pivotal in guiding clients through complex financial landscapes and ensuring their success. He is committed to delivering high-quality service, fostering strong, long-term client relationships, and provides the CP team with strategic guidance and support. Mario is the office coffee machine’s biggest fan (it’s never too late for an espresso)! Outside of work, Mario enjoys gardening, spending quality time with his family and dog Marlie, and when the season is right, you’ll find him mastering homemade wine and smallgoods!

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Alf Magnano

Alf Magnano (CPA)

In his role as Partner, Alf dedicates his efforts to guiding clients to achieve their business and financial goals in a way that is most beneficial for them. He particularly enjoys being available to provide support to clients as and when needed, always going the extra mile to help! Beginning in 2000, his journey with CP Partners has allowed him to refine his skills. He often mentors the CP team is various areas, helping to shape the next generation of accountants. Out of the office, Alf indulges in his passion for trekking through jungles in search of elusive plants, combining adventure with his love for nature. We have Alf to thank for the beautiful greenery spread throughout the CP office!

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Ruba Marcus

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Adam is a senior accountant at CP Partners, dedicated to achieving the best outcomes for clients by providing valuable advice. He enjoys working with a diverse range of clients - striving to build strong relationships with each of them. He also takes pride in sharing knowledge to help the rest of the CP team learn and grow. Adam’s role has recently developed into the (self-appointed) president of the CP Partners ‘Social Club’, where he helps to organise team lunches and events! On the weekends, you’ll find Adam on the sidelines as an Interchange Official at AFL games. He has been a dedicated North Melbourne member for over 40 years! Adam appreciates a nice glass of wine and enjoys travelling, with plans to explore more of the world soon!

Geena Chiodo

Geena Chiodo (CPA)

Geena joined the CP Partners team in 2019, bringing 4 years of experience from various accounting roles within the construction industry. She is a member of CPA Australia, an Excel whiz, and has evolved into CP Partner’s go-to expert for all things Xero. Geena has a strong attention to detail and a passion for problem solving and teaching new skills to other team members. She finds great satisfaction in building strong client relationships and being their trusted point of contact. Out of the office, Geena enjoys travelling with her partner to sunny destinations, getting lost in a good book, supporting Collingwood at AFL games, and spending time with family, friends and her dog Marlie.

Sudath Dissanayaka

Sudath Dissanayaka (CA Provisional)

As an accountant at CP Partners, Sudath enjoys collaborating with the team and working on a diverse range of clients. He has a passion for continuous learning and relishes the dynamic nature of tax that ensures each day is unique! In the office, you’ll find Sudath mastering new software with ease and always excited to take on a new challenge. Outside of work, Sudath is a keen car and Lego enthusiast. He enjoys spending time with his family, his two Golden Retrivers, and baby daughter.

Navdeep Singh

Navdeep Singh (CA)

With over 17 years of experience in accounting, auditing, and taxation, Navdeep brings a wealth of knowledge to his role as Team Leader of CP Partners’ Indian team. His day-to-day responsibilities include managing workflow for his team and working on accounting and compliance for various sized clients. Navdeep has fantastic analytical skills and is an instrumental part of the CP team. Outside of work, Navdeep enjoys listening to good music, and on the weekends, you’ll find him playing local cricket.

Sahil Arora

Sahil Arora (CA)

Sahil’s journey with CP Partners began in 2022 when he joined as an accountant within the Indian Team. His day-to-day responsibilities involve working on accounting and compliance for individuals and businesses of all sizes. Sahil is a hardworking and reliable team member, who enjoys taking opportunities to deepen his technical knowledge. He has a calm and composed demeanour, which enables him to handle challenges and pressure situations with ease. Outside of work, Sahil enjoys practising yoga, watching cricket, and playing when he can too!

Elizabeth Magnano

Elizabeth Magnano

Liz joined CP Partners in 2016 and brings with her over 25 years of experience in delivering administration services for various accounting and financial planning firms. Liz remains focused on enhancing client services and providing timely advice and support to clients. She finds it most satisfying helping clients to achieve their financial objectives. Liz is an instrumental leader of the client services team, always going the extra mile to provide client support. Outside of work, Liz is a passionate Carlton supporter in the AFL and enjoys following the Australian cricket team.

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Anna has been a valued member of the CP Partners team since 2001, bringing over 25 years of experience to her role. Throughout her tenure, she has embraced the evolving landscape of the accounting industry, dedicated to helping clients navigate changes. You’ll see Anna at the front reception desk, cheerfully greeting clients as they arrive. She takes great pleasure in interacting with clients and is an integral part of their journey as they achieve their financial and life goals with CP’s guidance. Outside of work, Anna enjoys gardening and cherishes spending time with her family, particularly since the arrival of her grandson.

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Suzie joined CP Partners in 2022 as administration support, marking her first role at an accounting firm. Since then, she has become an integral part of the client services team, always happy to assist clients with their queries both on the phone and in person. Suzie's involvement in various aspects of accounting work means she discovers something new every day! Her enthusiasm, dedication, and clear communication style makes her a cherished member of the team. On the weekends, Suzie enjoys spending time with family, travelling around Australia and overseas, and eating out at beautiful restaurants!

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