Many companies are continuing to hold off their tax liabilities, which often has resulted in companies being forced to appoint an external Administrator.
According to the Australian Taxation Office, there is over $10 billion outstanding in collectable liabilities, most of which comprises of the business sector.
Numerous businesses carry some degree of debt baggage. Some Directors delay paying the Australian Taxation Office the companies PAYG and GST liabilities, and may disregard penalty notices. However many Directors are unaware that failing to pay their Taxation liabilities is the biggest trigger for companies becoming insolvent.
This may result in the appointment of an External Administrator to examine the companies’ affairs and assist stakeholders to determine the most suitable direction for the companies.
Each year over 7,700 companies go into Voluntary Administration, and the numbers have increased each year.
Directors should not avoid the early warning signs of financial difficulty. If this situation arises, take early action and seek professional financial advice before it is too late, as directors could be held personally liable for tax liabilities owed their companies.
If your business isn’t doing as well as it previously had, don’t think that over night your business will miraculously accelerate. It may be time to re-evaluate the company’s goals and objectives and find new and realistic strategies to achieve those goals.