24 Nov The Grizzly Bear Hibernates for the…COVID-19 Pandemic.Reading Time: 2 minutes
The native North American Grizzly bear and the ATO. Can there be similarities between an animal and a sovereign regime?
Let’s compare the two and find out:
|The Grizzly Bear||The ATO||Similar?|
|Can stand up to 8 feet tall and weighing in at some 360kg||A regime that doesn’t physically exist but is written into the laws of our country||No|
|Soft and fluffy||Intangible||No|
|Highly intelligent, with excellent memory||Supercomputers that process mammoth amounts of data that remember your historical financial dealings||Yes|
|Has sharp claws||May issue director penalty notices||Yes|
|Powerful jaw, with sharp teeth||Has the power to issue garnishee notices||Yes|
|Is an omnivore that kills its prey||Bankrupts debtors and winds up companies to ‘kill off’ bad tax payers and maintain the integrity of the tax regime||Yes|
|Hibernates (torpor, goes into a deep sleep, to be precise) during the cold months||Hibernates during the COVID 19 pandemic to help business get back on track||Yes|
So there you have it, 5 similarities to 2, the Grizzly Bear and the ATO are almost identical, in a way. Who would have thought?
Focusing on hibernation, when it comes to the ATO’s debt collection practices during the COVID-19 pandemic, they have been a little like a bear in hibernation. In a recent call with the ATO, we were informed that since 1 July 2020, the ATO have petitioned for 6 bankruptcies and 3 wind-ups Australia wide. For many years gone by, that would likely have been a weekly number.
During the COVID-19 pandemic, the ATO is rightly running with the mantra ‘help businesses get back on track’.
But what comes next? At some point we will move past the pandemic. The ATO has recently announced that their debt collection practices are gradually waking up from the pandemic enforced hibernation with a tailored approach to debt collection. Initially, focusing on those taxpayers with larger debts and outstanding superannuation guarantee charge amounts while the balance of taxpayers will be pursued in the new year.
What will happen to all those taxpayers that entered into payment arrangements and deferred the liability to the future? What if they are unable to meet the future liability? Will the taxpayer be in a similar position to the salmon swimming up the stream? Will the Grizzly Bear use its intellect (supercomputers), claws (Director Penalty Notice) and powerful jaw with sharp teeth (garnishee notice) to ultimately catch the salmon (taxpayer) for lunch (liquidation/bankruptcy).
We at SV Partners are here to assist businesses and individuals deal with the Grizzly Bear before they become lunch and always look for solutions to best resolve the matter. We advocate for early intervention particularly when payment arrangements require future obligations which are unlikely to be met. Please do not hesitate to contact us if we can assist further.