ATO eyes ‘ phoenix’ bosses who dodge payments

RORTS by dodgy bosses costing more than $ 270 million were caught by the tax office last year, according to figures to be released today.

And a new report commissioned by the Australian Taxation Office said businesses that used company structures to rip off customers, staff and suppliers cost the economy up to $ 5.13 billion a year.

As part of a crackdown on so- called “phoenix” companies, the ATO has set up a phone line for people to dob in businesses that use corporate structures to escape paying invoices, wages or superannuation entitlements.

The ATO’s Phoenix Taskforce conducted 340 audits last financial year and identified $ 270 million in tax liabilities from these dodgy businesses. More than $ 190 million was recouped.

The taskforce, set up in 2014, has so far found more than $ 1 billion in liabilities, and collected close to half of that in owed taxes. Seven people face criminal prosecutions as a result of the audits last year, and 34 others have been banned from acting as company directors.

But a PricewaterhouseCoopers report suggests the unlawful use of company structures is actually much wider. It estimated that illegal “phoenix” companies directly cost the economy between $ 2.85 billion and $ 5.13 billion in 2015- 16.

The Federal Government has vowed to target businesses that try to avoid paying entitlements and laws are also being drafted to prevent workers being left dry when businesses collapse.

Financial Services Minister Kelly O’Dwyer said the Government was planning to further target company fraud.

“Phoenixing hurts hardworking Australians … it causes a significant drain on the economy,” she said.