MaC Insolvency was approached by a director of a restaurant business receiving increased pressure from the Australian Taxation Office (‘ATO’) for unpaid tax and superannuation liabilities. To the director’s benefit, the external accountant had ensured that all tax and superannuation lodgements were lodged on time, even if they were not paid.

The director was issued with a Director Penalty Notice (‘DPN) from the ATO giving him 21 days to either:

  • Pay the debt owing to the ATO in regard to GST, PAYG, and Superannuation; or
  • Place the company into voluntary administration or liquidation

If the director had not carried out one of the above actions within 21 days, he would have fallen personally liable for the Company’s ATO debts. This would have compromised the director’s personal assets such as his family home and personal belongings.

Upon the director approaching the MaC Insolvency team, we were able to assist the director to understand his obligations in regard to the DPN and provide a pathway forward for the director to avoid personal liability. After our initial meeting with the director, we quickly ascertained that the business’ difficulties were affecting his personal health and that he was not inclined to attempt to rescue or restructure the business.

Within hours of approaching MaC Insolvency the director placed the Company into liquidation. This resulted in all recovery action by the ATO ceasing. Furthermore, the director was able to refer all stakeholders to MaC Insolvency, putting an end to the stressful calls he’d been receiving from creditors and stopping the need for him to juggle multiple payments trying to keep everyone happy.

The liquidation was a tremendous relief for the director, allowing him to step back from the angst and concerns that come with running a distressed business. He commenced employment elsewhere.

The above situation could have had an extremely different outcome if the director had not sought timely advice from MaC Insolvency. Without the liquidation, he may have been in a position whereby he still had to operate a distressed business together with losing the family home to meet the ATO’s DPN debt.

If you have received a DPN, or your Company is currently in the position where your taxation obligations are not up to date, or an unmanageable ATO debt continues to increase, contact the team at MaC Insolvency for a no obligation discussion. We’ll quickly tailor a customised solution for your scenario.