Federal Court orders SpinifexIT chief to pay the ATO $1.46 million in outstanding tax liabilities

The Australian Taxation Office has won a million-dollar court case against a chief executive after he was found to have outstanding personal tax liabilities, accumulated over a seven-year period.

The Federal Court ordered Michael Christian Bramwell to pay $1.46 million, plus interest and costs, to the ATO late last month, after he did not appear in court to defend himself or give evidence.

The sum of money includes unpaid tax, administrative penalties for not lodging tax returns, shortfall interest charges and general interest charges.

Bramwell is employed by global software business SpinifexIT, according to Federal Court documents, as well as his LinkedIn account.

SpinifexIT appointed Bramwell chief executive of the company’s Europe and Middle East operations in November last year but has since deleted the press release announcing his appointment from its website.

At the time, SpinifexIT touted Bramwell’s “deep knowledge and understanding of customer needs”.

Court documents show a representative for the Tax Commissioner managed to have a telephone conversation with Bramwell in January informing him of the proceedings.

However, Bramwell failed to appear at directions hearings in both February and March, and he also did not file a defence.

As a result, Justice Tony Pagone ordered Bramwell to pay the ATO $1.46 million, plus interest and the ATO’s costs.

Anthony Bradica, tax partner at law firm Hall & Wilcox, told SmartCompany the judgment relates to Bramwell’s personal tax affairs between 2003 and 2011 but it does not specify exactly how the tax liabilities arose.

“It could be anything – income tax accounts for ordinary income as well as capital gains,” Bradica says.

“It is a high number, but on the face of it, there are probably a few aspects. It appears to relate to quite a number of years of non-lodged tax returns.

Bradica says disputes over tax liabilities often result in additional interest and penalties owed to the ATO.

“[Generally], by the time the parties have discussed and fought over the amount of tax payable, the ATO eventually is able to charge interest on late payments,” he says.

Bradica says these penalties can be anywhere between 25% to 75% of the original tax owed.

“It’s not uncommon for taxpayers, even when they have a tax liability of, say, x, to have a total amount payable of double that – that’s the penalty and interest component,” he says.

As for whether it’s likely the ATO will be able to recover its $1.46 million, Bradica says that all depends on whether Bramwell is based overseas or in the country.

“If ever the gentleman comes back to the country, they [the ATO] can seek to have him pay that money and the extent to which he has assets in Australia will satisfy the debt,” he says.

“But beyond that, if he has left the country and doesn’t have any local assets, there is very little the Tax Commissioner can do. But the ATO is in constant conversation with other tax authorities.”

A spokesperson for the ATO told SmartCompany the tax office is unable to comment on the court case.

“Due to confidentiality provisions in the Tax Administration Act, the ATO cannot comment on any individual’s or entity’s tax affairs,” the spokesperson said in a statement.

SmartCompany contacted Spinifex IT numerous times to ask if Bramwell is still employed by the company and when the business became aware of the court action but did not receive a response prior to publication.

SmartCompany contacted Bramwell but did not receive a response prior to publication.