VOLUNTARY LIQUIDATION HELPS PROTECT DIRECTOR’S PERSONAL ASSETS
The Director of a Plumbing company was at risk of personal liability with $180K owing to the ATO.
When we received a call from the director of a small plumbing company, the ATO were piling on the pressure. He had two days left on a deadline to come up a with a suitable payment arrangement for a $180,000 debt or the ATO was going to pursue him personally. Business was slow and revenue wasn’t at a level where the director could make a payment arrangement and keep up with ongoing trade debts. He’d had enough and wanted out.
We patched in the director’s accountant who helped us establish the breakdown of the tax debt and the company’s reporting history. It turned out $80k of the debt was for unpaid Pay-As-You-Go that had been properly reported within the required timeframes.
We explained to the director that his personal assets were at risk, but if he commenced a Voluntary Liquidation before the ATO took further action, he could not be made personally liable for the company’s tax debt. This was possible because the company’s PAYG debt had been reported within 3 months of the due reporting date, meaning the ATO could only send the director the less severe 21 day version of a Director Penalty Notice that can be avoided by placing the company into liquidation.
We emailed the Liquidation Appointment Documents to the director within two hours of his call. He arranged for the forms to be signed that evening and paid the agreed contribution for the fee. The liquidation was effective on the same day he called. We informed the ATO of our appointment as liquidator the next morning.
The director said he was amazed we were able to assess his situation so quickly and have a solution in place within hours. The director has put the situation behind him and is now running a new successful company.