The ATO is chasing me – help!

Dear Aunty B,

I have been going through hell struggling to pay bills and with a wife who has been sick. Now I have these ATO guys chasing me and I don’t know what to do.

I just need some breathing space as things are starting to turn around, but if I agree to their payment plan I won’t have the cash to keep the business going. I went and saw a financial accountant who says I should think about winding up the business and then starting again under a different name. Is that my only solution?

What do I do?

Please help,
Gold Coast

Dear Please help,

Okay, here is what you do. Go and find a reputable accountant. Your current adviser is suggesting you do a “phoenix”, which relates to some old mythology where this beautiful bird rises from the ashes. Sounds great doesn’t it? Except it is illegal and the corporate watchdog is getting better at coming after phoenix operators.

Think of it this way. Imagine you were owed a debt by a company which decided rather than paying you they would shut down and then start under a new name. It happens to all of us and it makes me furious.

So what you need to do is this. Find a reputable accountant. Explain your dilemma and sit down with them and run through your options. You must be very honest about the state of your business. Do you really have a hope of turning things around? If so get the accountant to come up with a workable plan. This may include paying your current tax and then paying the backlog off as slowly as they will let you. There is no point treating the ATO as the enemy.

You have to treat them as a partner in your business and be transparent with them. So face facts and don’t be tempted by dodgy solutions that will only make things worse.

Be smart,
Your Aunty B

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