Irish Bentley Lawyers predict that DPNs will become one of the ATO’s main collection tools.

The ATO is training their staff and automating their processes to issue the notices right now.

Directors of companies with arrears need to take prompt action to avoid or mitigate personal liability.

We recommend:

1. Do not delay – early action can save you and your company – be proactive, not reactive.
   The consequences of delay can be irreversible so you should act quickly and proactively.
   The legislation surrounding taxation law, and insolvency law contains many “deeming” provisions and it is extremely risky to delay getting advice, taking steps to minimise your personal liability, or rescue he company.
   Timeliness is everything in this area.
2. Conduct due diligence to ascertain the PAYG and superannuation liability position before accepting the office of Director.
   New directors can be deemed liable for debts incurred before their appointment after as little as 14 days (according to a decision handed down by the Supreme Court).
3. Get Director’s insurance:
   Insurance is available to limit the exposure – talk to one of our lawyers or insurance brokers about your insurance options.
4. Ensure your ASIC details are up to date and ideally provide an address for service that is monitored by a professional:
   DPNs and other notices only need to be posted to the address listed with ASIC and it is not enough to prove you did not receive it.
   Accordingly it is imperative that you list an address that has a proper letter register to ensure you are aware ASAP, and can take steps ASAP. We recommend that you list your lawyer or accountant for this purpose (provided that lawyer or accountant has insolvency law experience and understands the law surrounding these issues).
5. Report on time:
   Ensure that you lodge the company BAS forms and Superannuation Guarantee Charge Statements on time.Do this EVEN IF YOU CANNOT PAY THEM. This protects the directors from personal liability.
6. Consider a payment plan, and get advice on whether you should seek for the remission of GIC and penalties.
   If you cannot pay, then propose a realistic payment plan, ideally presented by an experienced insolvency lawyer to ensure that you are not making any admissions of insolvency or other liability.
   Irish Bentley Lawyers are experienced at presenting persuasive submission to the ATO, and we are familiar with the many policy considerations which are taken into account.
   This directly effects what deals can be negotiated, what remissions can be secured, and how long you will have to pay same.
7. Borrow money to pay the tax debts via a loan dedicated to paying the tax debt:
   It is (generally) better to borrow money elsewhere to pay tax debt, than to pay the general interest charge.
   Any interest paid on a loan taken to pay tax, is also deductible, so ensure the loan is stand alone to simplify the deduction.
8. Seek Advice ASAP.
   Taxpayers and directors usually seek advice when it is too late, because they do not understand the consequences that flow from late reporting, delay, or the fact that statements made to the ATO can be used as evidence against them.
   The ATO do take notes of every discussion you have with them, so you need to be CAREFUL!
   If tax and superannuation debts cannot be paid then specialist advice should be sought immediately, and can save you significant money, and avoid prosecutions.
   For example:
    
   1. Lets say a director states to the ATO:            “We just cannot afford to pay it right now as business has been down this month”.
      Effect: This is then noted on the company tax records with the ATO, and can be used as evidence that the director knew the company could not pay its debts (ergo it is insolvent), yet the director is allowing the company to trade insolvently. In effect, the director is admitting that they are allowing their company to trade insolvently which in turn exposes the director to liability for all company debts from that date, and also to a prosecution by ASIC for insolvent trading seeking fines and penalties.
   2. Directors can be called on to repay the ATO for payments clawed back by liquidators for unfair preferences.
      Please note that advisors are at risk of a claim from their clients if they don’t inform them of the director’s statutory indemnity to the ATO under section 588FGA of the Corporations Act.
   3. Directors are automatically personally liable for PAYG and superannuation contribution liabilities that are unpaid and unreported for three months. The personal liability accrues irrespective of the ATO issuing a DPN. The DPN just crystallises the date the personal liability is to be paid. You may be able to avoid personal liability if you act quickly so you must seek advice on the DAY that you receive the DPN.

   If in doubt, get advice because the consequences of delay can be irreversible.

9. Protect your assets ASAP – ideally before any liability has arisen:
   Asset protection is never absolute, however the strength of your asset protection is directly related to how early it is implemented, and how effectively it has been set up.
   The more layers of protection that you implement, the stronger your protection is and you should discuss your options with an experienced insolvency lawyer to decide upon the most cost effective structure.
   It is never too late to protect your assets, and at the very least it sets up a negotiating position for your lawyer should a creditor seek to unravel the protection.
   Irish Bentley Lawyers charge as little as $3000 for the most basic asset protection, and this structure can then be updated every few years to take into account capital gains in your assets. This is cheaper than most insurance options for your house.
10. Consider your other options under the insolvency sections of the Corporations Act:
    If your cash flow situation seems hopeless because he debts have climbed too high, then there are provisions set out in the Corporations Act which can be utilised to rescue your business and company by reaching a suitable arrangement with creditors. There are options other than liquidation.
    You should seek help from an insolvency lawyer who also has experience in tax matters as they understand how to negotiate with the ATO during any creditors meeting, and they understand the policy considerations that need to be satisfied.
    The Australian insolvency laws are (in part) built around the theory that it is better to rescue a business, then to destroy it, due to the investment in goodwill, business systems, and the desire to keep the company employees employed. These provisions should be utilised where possible and you should seek advice from an experienced insolvency lawyer on your options.
    Irish Bentley lawyers provide advice in both taxation matters and insolvency lawyers, and we act for many administrators and liquidators.
    Our initial consultation fee is fixed at $330 and we discuss all of the above issues and apply them to your personal or corporate scenario.

The post Ten tips for all Directors on how to minimise your risk of being personally liable for company debts appeared first on Irish Bentley Lawyers.

1. There are 800,000 mortgages in Ireland. 100,000 of these are in arrears of 90 days or more.
2. The length of bankruptcy in Ireland is 12 years.
3. In 2012, only 34 bankruptcy applications were lodged in Ireland despite the economic climate as many people headed to the UK to take advantage of their more lenient bankruptcy rules.

You do not need to go to the depressed UK to find more lenient rules.
Australia has a 3 year bankruptcy period, and you can get an early release if you pay a few cents in the dollar to get the majority of creditors supporting you.
Irish Bentley Lawyers specialise in bankruptcy law, and migration law, so we can help you.
Our in-house counsel has over 20 years of experience running his own Law Firm in Ireland.
That means we understand both legal systems and the best way to work out any past debt issues.
We also provide asset protection advice which will also help protect any savings that you accumulate whilst in Australia.
In short, Irish Bentley Lawyers provide a holistic legal advisory service specialised at the Irish market, and we would be happy to help you.
Please call us on +617 3891 3333

The post Are you working in Australia, to escape the recession in Ireland?
Do you have debts that need to be cleared, but you do not want to go bankrupt for 12 years? appeared first on Irish Bentley Lawyers.

In a recent pro bono case referred by QPILCH, Irish Bentley Lawyers negotiated substantial compensation for an elderly gentleman who was ousted from his home after he suffered a stroke. He had no funds to cover the legal costs, so Irish Bentley Lawyers agreed to help and we were able to negotiate with the relevant parties and secure compensation to help fund his retirement.

Irish Bentley Lawyers believes that the most useful contribution we can make to the community is to use our knowledge and expertise to assist those who could not otherwise access legal services.

The post Irish Bentley Lawyers proudly support the Queensland Public Interest Law Clearing House (“QPILCH”). appeared first on Irish Bentley Lawyers.

The taxpayer falsely claimed $540,898 in GST refunds by lodging 27 false BAS Statements over an 18 month period on behalf of 3 companies of which he was the sole director and shareholder.

He received $380,000 before the false BASs were detected.

The BASs were lodged between 9 July 2004 and 4 January 2006), based on a claimed total business expenditure of $6.7m reported for four (4) businesses.

The Court said the figure “was a complete fabrication, as the nominated entities were not engaged in any trading”.

The taxpayer pleaded guilty to 4 counts of dishonestly obtaining a financial benefit by deception contrary to s 134.2 of the Criminal Code Act 1995 (Cth). On 30 March 2012, he was sentenced by Flannery DCJ to a total head sentence of imprisonment for 4 years and 3 months commencing on 30 March 2012 and expiring on 29 June 2016 with a non-parole period of 2 years and 2 months expiring on 29 May 2014.

He appealed against the severity of the sentence.

The taxpayer claimed that his case involved “exceptional and very special circumstances” and that “a custodial sentence when considering all the circumstances is unjust and unsafe”. The Court of Criminal Appeal disagreed and upheld the sentence that had been imposed. (Edwards v R [2013] NSWCCA 54, NSW Court of Criminal Appeal, Johnson, Harrison and Adamson JJ, 13 March 2013.)

Please talk with our Principal Zeke Bentley if you have been audited, searched or charged as a result of understating your tax position.

Zeke has over 16 years’ experience in the area, and is currently contesting tax assessments exceeding $40 million.

it is important to secure experienced legal representation when dealing with any criminal matter, or tax matters.

The post 4 year jail sentence for falsely claiming $540k in GST refunds appeared first on Irish Bentley Lawyers.

1. Any debts that are incurred by the company is trading insolvently, noting the test of insolvency can be strict and can be simply whether the company can pay its debts within the terms of trade listed on all invoices. Most companies and businesses trade insolvently when you think it.
2. Directors can also be held responsible for any company tax debts, where they are served with a director’s penalty notice and fail to appoint an administrator or liquidator within 21 days to govern the company’s affairs. This is discussed below, and generally these are used where there are outstanding PAYG or superannuation payments.
3. Since 1 July 2012, company directors have been personally liable for any tax owing by the company, where the company has been late in lodging the required BAS, or has been late paying unpaid obligations under the Superannuation Guarantee and Pay As You Go schemes.

Directors can also be held responsible for any company tax debts, where they are served with a director’s penalty notice and fail to appoint an administrator or liquidator to govern the company’s affairs. These are generally these are used where there are outstanding PAYG or superannuation payments. This is especially concerning as service is effected by simply posting the notice (by normal post) to the director’s address (listed with ASIC – even if the director no longer lives there). The ATO do not need to prove the director received it, and the director cannot escape liability by proving he did not receive it. All the ATO need to do is prove they posted it (ergo that they placed it in a mail box). Full stop.

Since 1 July 2012, company directors have been personal liable for any tax owing by the company, where the company has been late in lodging the required BAS, or has been late paying unpaid obligations under the Superannuation Guarantee and Pay As You Go schemes. Company directors who do not report unpaid superannuation contribution liabilities by the due time risk being personally liable, even if they comply with the requirements of a subsequently issued Director Penalty Notice. Accordingly, even if directors can’t pay the required funds by the due date, it is, to say the least, most prudent for them to report the liability by the due date. The first due date for the reporting of such liabilities is 28 November 2012.

The background to the above is that, under the present law, if company directors appoint administrators or wind up a company with outstanding superannuation guarantee debts, those directors can only avoid personal liability under the Director Penalty Notice Liquidation/Administration Safety Net if they report any outstanding debts from the June 2012 quarter before 28 November 2012, which is the “drop dead date” for the June 2012 quarter. After that, it is too late. “Drop dead dates” occur from quarter to quarter thereafter.

If company directors are in any doubt about the above liabilities, they should seek advice from Irish Bentley Lawyers.

The above newsfeed is a basic outline and should not be relied upon. There are defences available and processes that can be implemented to assist.

It is important that you understand the potential risks, and that you seek advice from an expert if you have any concerns. You should be concerned if your reporting is late, if your payment of PAYG or Super is late, or if your tax is overdue.

The post Directors are more responsible for company tax debts than ever before. appeared first on Irish Bentley Lawyers.

Chinese New Year, also known as the ‘Spring Festival’, is the most important of the traditional Chinese holidays.

On this special day, I extend my best wishes to all Chinese and friends of China here in Australia.

The Year of the Snake officially begins on 10 February 2013, so be sure to wish all your Chinese friends longevity, happiness, wealth and good fortune!

新年快乐!  恭喜发财!

Happy Chinese New Year and may this year be even more successful and prosperous than the last!

The post Happy Chinese New Year! appeared first on Irish Bentley Lawyers.

1. income generated by Australians overseas. Irish Bentley currently act for clients hit with tax reassessments exceeding $40M involved in big-ticket items such as ‘Project Wickenby’.
2. ramping up domestic Reviews and Audits to detect (and penalise) misleading claims.

The ATO Compliance targets for 2011/12 include:

1. Deductions for Work-related Expenses:-
   Since 2007 deductions for work-related expenses have increased by 16%.
   The ATO has highlighted it will particularly scrutinize the deduction claims of:
   1. Carpenters and Joiners
   2. Earthmoving and Plant Operators
   3. Flight Attendants, and;
   4. Real Estate Employees.
2. Directors, Executives and those on incomes exceeding $1m.:-
   The ATO intends to review their closely held assets including charitable trusts and self-managed super funds.
    
3. Small Businesses:-
   The ATO plans to continue to target Small Businesses for:
   1.  unreported Cash Income – the ATO will investigate at least 46,000 small businesses are to be investigated for.
   2. failures in their PAYG obligations.
   3. superannuation non-compliance, with some 12,500 employers identified as worthy of further investigation, mostly in the following industries:
       
      1. Cafes, Restaurants and Bars
      2. Real Estate businesses
      3. Carpentry businesses
      4. IT services and design, particularly PC building businesses
      5. Accommodation providers
      6. Accounting.

In the Compliance Program Report of 2011/12 the ATO state, “This year we will:

• enhance our tax fraud detection and management
• concentrate on sham contracting arrangements where individuals are incorrectly set up as contractors, instead of as employees of a business
• deliver our GST commitments to the states and territories
• reduce phoenix arrangements through a coordinated program of reviews and audits of directors
• focus on those who fail to report some or all cash transactions to ensure a level playing field
• protect employee rights by ensuring employers are paying the correct amount of superannuation guarantee
• use data matching and risk profiling to identify those who are using non-lodgment or partial lodgment to circumvent their responsibilities
• identify businesses who have received government payments and review those suspected of not correctly reporting income or not meeting their pay as you go withholding and superannuation obligations
• examine businesses operating outside our small business benchmarks
• extend our focus on lodgment compliance within private groups, including wealthy Australians
• continue to deal with the abusive use of tax secrecy havens including Project Wickenby
• strengthen our involvement in multi-agency task forces that target the tax implications of organised crime
• consider tax exploitation schemes and apply promoter penalty legislation
• implement strategies to deal with concerns we have with trustees of self-managed superannuation funds
• regulate self-managed superannuation funds and act against the illegal access or release of superannuation
• engage our very largest taxpayers in cooperative compliance approaches
• examine large business corporate governance processes for managing income and indirect tax risks
• develop strategies to optimise the role of the Tax Practitioners Board, including the referral of tax practitioners who breach their responsibilities
• develop a framework to tailor information, products and services for registered agents that enable us to differentiate and target our approaches
• focus on tax returns or activity statements lodged by unregistered preparers.

The post ATO to target overseas income, allowable deductions, small business and high income taxpayers. appeared first on Irish Bentley Lawyers.

It is important to note that you will only receive 65% of your employers contribution – the other 35% is retained by the Australian Taxation Office (“ATO”) as DASP withholding tax.

However, if you are a temporary resident whose temporary visa has ceased to have effect and you do not claim your DASP from your superannuation fund within 6 months of departing Australia, then your superannuation benefit is treated as unclaimed money and the superannuation fund must pay it to the ATO. In these circumstance, you may be able to reclaim your superannuation benefit (less the DASP withholding tax) directly from the ATO at any time where certain conditions are satisfied.
Contact us on (07) 3891 3333 to find out if you are eligible to apply for a withdrawal of your superannuation.

Our Principal, Zeke Bentley, has been helping clients with tax matters for over 15 years, and is currently involved in a project wickenby matter where we are seeking the review of a $40M assessment.

The post CAN YOU CLAIM YOUR SUPERANNUATION? appeared first on Irish Bentley Lawyers.

If you are a director of a company that has not paid the 9% super guarantee (superannuation contributions) for the June 2012 quarter, you must lodge the overdue SGC statement with the Australian Taxation Office (“ATO”) by 28 November 2012. Failing to do so will expose you to personal liability, which can only be avoided by paying the outstanding SGC.

If you are struggling to meet your superannuation obligations, please contact Zeke Bentley of Irish Bentley Lawyers as soon as possible on (07) 3891 3333. The team at Irish Bentley are dedicated to resolving your situation as soon as possible.

The post New laws make directors personally liable for their company’s unpaid super guarantee charge appeared first on Irish Bentley Lawyers.

The recent decision in Superior IP International Pty Ltd v Ahearn Fox Patent and Trade Mark Attorneys [2012] FCA 282 (“Superior IP International”) demonstrates the Court’s treatment of the “genuine steps” requirement under the Civil Dispute Resolution Act 2011 (Cth) (“the Act”) to applications to set aside statutory demands made in the Federal Court.

The Act requires that when a party brings proceedings in the Federal Court or Federal Magistrates Court, they must file with the court a genuine steps statement setting out either genuine steps that have been taken to seek to resolve the dispute in negotiation, or the reasons why no steps have been taken. The respondent party must then file their own genuine steps statement in response.

In Superior IP International, the Respondent firm issued a number of invoices to the Applicant for services it allegedly provided, but the Applicant disputed nine unpaid invoices totaling $10,706.33.

The Respondent served the Applicant with a statutory demand in respect of this outstanding amount, and in response, the Applicant filed an application in the Federal Court seeking an order that the statutory demand be set aside on the grounds that there was a genuine dispute in respect of the debt.  Significantly, the parties had not attempted to resolve the dispute before the Applicant filed its application, and no “genuine steps statement” had been filed.

The Court set aside the Respondent’s statutory demand on the grounds that a genuine dispute existed in respect of six of the invoices, while the total of the remaining three invoices was of an amount less than the statutory minimum for a Statutory Demand.

In reaching its decision, the Court condemned the conduct of the parties, describing the hearing as the “absolute antithesis of the overarching purpose” of the Act, for conduct including failing to make any attempt to resolve the dispute in accordance with the objects of the Act.

As a consequence of that conduct, the Court made directions that the parties seek independent legal advice on the question of costs in the proceeding, that the party’s lawyers were to be joined as parties to the proceeding for the purpose of determining the issue of costs, and that the lawyers involved be referred to the Queensland Law Society, the Bar Association of Queensland and the Legal Services Commission.

This case demonstrates that federal court litigants must comply with the “genuine steps” requirement by taking genuine steps to try to resolve their dispute before they apply to the Federal Court for an order to set aside a statutory demand.  Further, the obligations to file a genuine steps statement in accordance with the Act applies to the parties involved and their lawyers.

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