Affected clients should consider a Small Business Restructure (SBR).

Recent Updates

The economic landscape in Australia has tightened, with tax-related debts to ATO now a major factor in insolvencies. On 25 June 2024, ATO Commissioner Rob Heferen indicated that collectable debt now exceeds $50 billion. Small businesses account for $34.1 billion, prompting an aggressive ATO crackdown to recover tax debt including a spike in court wind-up applications.

ATO are responding positively to Small Business Restructure proposals. Chat with us on options.

Insights from the ATO

Small businesses can be proactive and restructure using SBR procedure. ATO have been very commercial to work with, and support SBR proposals.

If small businesses do not use SBR, then they can consider an ATO repayment plan. If a repayment plan defaults or fails, ATO may use the following enforcement tools:

• Director penalty notices
• Personal liability
• Garnishee of bank accounts and debtors
• Legal actions including summons, creditors petition, wind-up
• Notification of business tax debt to collection agencies

SBRs are suitable for small businesses in construction, accommodation and food services (cafes, restaurants, take-away food services), and other services (personal services, repairs, maintenance), amongst others.

The ATO is commended for participating in restructuring of eligible small businesses with tax debt using the SBR procedure outlined in Part 5.3B of the Corporations Act 2001. Until the end of October 2023, the ATO was a creditor in 98% of 511 companies proposing an SBR, and the majority creditor in 90% of those companies. 92% of the proposals were successful. In line with community expectations, the ATO will not support proposals by those that seek to take advantage or refuse to meet their obligations or seek an unfair financial advantage (refer to PS LA 2011/16 para 32).

Our experience

David Levi is a registered liquidator, registered with the Australian Securities and Investments Commission. As a registered liquidator, he acts as a Small Business Restructuring Practitioner.  He has a wealth of experience, and is passionate about assisting small business and sharing his knowledge. Chat with David on 0418 602 466.