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We understand that admitting your business has a problem can be tough, and it’s often an extremely personal matter. You may have developed the business over a period of several years or decades and going insolvent can represent a personal failing. This is an opportune time to engage the services of a professional.

Corporate Lifeline is a professional and experienced organisation based in Sydney, with staff located all over Australia. We’re here to work closely with you and your company, and guide you through the often complicated processes of liquidation. We can also walk you through a number of other issues that you’ll want to understand, such as the risk of insolvent trading.

You’re able to talk with an experienced insolvency practitioner/ registered liquidator straight away and you’re given a free quote with no hidden costs or other surprises. What’s more, we also handle the often difficult process of working with your creditors. Waiting is commonly the biggest issue, so if you’re experiencing problems with regards to your business don’t hesitate to reach out to us. Insolvency doesn’t have to be the end of the business.

Under Section 260-5 of the Taxation Administration Act 1953, the ATO issues Garnishee Notices to companies (the taxpayer) to receive taxation amounts not paid on time. With the ATO responsible for collecting taxes from millions of individuals and businesses every year, compliance remains a major issue and Garnishee Notices are just one avenue for the authority to collect what is owed.

Of course, it is in the best interest of all parties to pay taxation amounts when due. However, as a result of cash flow issues or other financial situations, many businesses find themselves in this difficult position.

There are two common types of ATO Garnishee’s that are issued Australia wide – Garnishee to Debtors and Garnishee to Bank Accounts. While they are very similar in the fact that the ATO is paid the taxation amount due, the manner in which they operate is slightly different.

Garnishee to Debtors
In this scenario, the ATO issues a Garnishee to funds being paid from the company’s debtors. These debtors are provided a letter from the authority stating that all money to be paid to the company be redirected to the ATO. In essence, in an effort to reduce your debt to the ATO, all payments from particular debtors aren’t transferred into your account – instead paid to the authority.

Your business is notified of this change and this can apply to merchant card facilities, trade debtors or individuals that owe your enterprise money.

Garnishee to Bank Accounts
Alternatively, the ATO can target your other main source of money – business bank accounts. To collect outstanding taxation charges, the authority has the power to serve a Garnishee notice on your bank accounts. As such, your financial institution or bank is issued a letter to release funds from a particular account directly to the ATO.

It is important to remember that the authority will specify when payments from the bank account will be made and how much money they are collecting.

The ATO has the power to collect outstanding taxpayer money – regardless of your financial situation at the time.

This means that if revenue is not available through debtor payments or bank accounts, it can have a serious impact on your business operations. For example, you may have insufficient cash to pay employees or other creditors which you owe.

As a result, until the ATO Garnishee is lifted, the business may find it difficult to make simple payments or continue trading within the market. This is a serious issue and requires the assistance of experts such as the team at Corporate Lifeline.