BRI Ferrier principal Moira Carter sounds warning on Queensland tax crackdown

As the tax office comes knocking a North Queensland liquidator is warning of a wave of insolvencies. See the list of insolvencies this year.

The Australian Taxation Office is issuing 80 warning notices every day to business owners and a North Queensland liquidator is warning of a wave of post-pandemic insolvencies.

Townsville-based BRI Ferrier principal Moira Carter said insolvencies would ramp up now that the ATO was putting pressure on businesses.

The latest Australian Securities and Investments Commission data shows the number of Queensland company insolvencies surged 23 per cent on the previous financial year, to 1004.

The ATO was lenient during the pandemic but received a funding boost in the latest federal budget to recover some $9.1bn in debts.

In the last financial year, liquidations in Queensland and nationwide have far outpaced the previous 12 months.

The final tallies haven’t even been totalled and the current ASIC figures cover until June 11.

Nationwide administration and liquidation numbers rose 17.2 per cent to 5520 for the financial year.

The number of liquidations in Queensland rose 23 per cent to 1004 in the 2023 financial year. Picture: NCA NewsWire / Emma Brasier

“Insolvency is going to ramp up now because the ATO had stopped putting pressure on the businesses,” Ms Carter said.

Ms Carter was appointed administrator of the Townsville Crocodiles Basketball Club in 2015 before the franchise ultimately folded the following year.

Townsville Crocodiles administrator Moira Carter speaks to media in 2015 during the liquidation of the basketball franchise. Picture: Shae Beplate.

“What starts an insolvency is saying ‘you have to pay me’. So the financiers start getting nervous and that snowballs into liquidation.”

The construction industry accounted for about 35 per cent (2074) of the external administration or controller appointments nationwide this past financial year, followed by other services (633), retail (499) and manufacturing (433).

There have been 16 liquidation notices in the Townsville Local Government Area for the past year.

More than three-quarters of the ATO’s roughly 400,000 payment plans are with small businesses.

Australian Taxation Office assistant commissioner Tim Loh. The ATO and Treasury aims to reclaim $9.1bn in unpaid tax over the next five years by cracking down on compliance.

However, the ATO is issuing 80 to 100 director penalty notices every day, on average.

After a notice, the ATO can recover debt from a company director by garnishee notice, offsetting tax credits against director penalties and/or initiating legal proceedings.

The department does however have an amnesty program where failure-to-lodge penalties can be waived if the businesses aggregated turnover is less than $10m at the time the original lodgement was due.

The amnesty covers lodgements dues December 1, 2019 to February 28, 2022 for income tax, activity statements and fringe benefits tax.

Originally published as BRI Ferrier principal Moira Carter sounds warning on Queensland tax crackdown