ATO Garnishee notices
If you have an outstanding tax liability and have been unable to enter into an acceptable payment arrangement with the ATO, it is likely the ATO will issue a garnishee notice to a third party such as your employer, your bank or even your customers. A garnishee notice can be appealed at the Administrative Appeals Tribunal (AAT) however the ATO is not required to suspend recovery action pending the outcome of the appeal. The only way to prevent recovery action by the ATO whilst an appeal is determined is by an Order of the Federal Court. Garnishee notices can therefore lead to insolvency proceedings.
Who is at risk of receiving ATO garnishee notices?
The ATO sends out garnishee notices to individuals and businesses across Australia every year. According to the ATO, the notices will not affect organisations undertaking normal commercial transactions. In short, if you pay the tax you owe or enter into an acceptable arrangement, there will be no repercussions.
I have received a garnishee notice – what now?
Around 440,000 taxpayers (including 10,000 businesses) are expected to receive a garnishee notice this financial year. We constantly receive calls from concerned individuals and directors over the severity of the demand and the lack of appeal options.
“As the ATO’s powers become stronger and backed up by better data matching, it is more important than ever to get the help of an experienced advisor whenever you need to deal with them.”
Whatever the circumstances that led you to receive a garnishee notice, it’s vital you act fast – particularly if your liabilities now exceed your assets. Directors and sole traders faced with a garnishee notice are increasingly asking us for advice. We have already helped many directors by liaising with the ATO on their behalf. We can offer advice on restructuring and refinancing to release funds from a company to meet demands for payment.
If you have received a garnishee notice and are concerned about your company’s ability to pay, our registered insolvency practitioners can provide a free consultation or phone call. Contact Us on 1300 747 577.