Insolvency and payroll tax
What to do if your business is unable to pay payroll tax due to insolvency, and the actions Revenue NSW will take for businesses who do not meet their payroll tax obligations.
What to do if your business is insolvent
A business may struggle to pay its debts at any time.
If your business is in this situation it may be at risk of becoming insolvent.
Insolvency occurs when a business can’t pay its debts when they fall due and payable.
If your business is facing insolvency seek specialist advice from a qualified and registered insolvency practitioner.
Some common options for insolvent businesses are to liquidate, or enter into voluntary administration or receivership.
Go to the Australian Securities and Investments Commission's website to read more about insolvency and the steps you may need to take.
Be alert to advice about illegal phoenix activity
The Australian Taxation Office (ATO) recommends businesses be wary of inappropriate insolvency advice that could lead to illegal phoenix activity.
Such advice includes suggestions that an insolvent business intentionally creates a new company and liquidates the old company, in the hope the new company will continue to trade without debt.
The ATO has released alerts about some practitioners who encourage business to engage in illegal phoenix activity.
Go to the ATO's website to read more about insolvency advice and illegal phoenix activity.
If you encounter practitioners who encourage illegal phoenix activity please let us know by contacting our payroll tax team on 1300 139 815 (national) or +61 2 7808 6904 (international). You can also email us at [email protected]
Read more about illegal phoenix activity.
Help with payments and your tax obligations
If you are experiencing difficulties in meeting your state tax obligations please contact us as soon as possible to discuss your options.
Call 1300 139 815 or +61 2 7808 6904 for general enquiries, such as your eligibility for an instalment plan or deferred payments.
Should you already have outstanding debt and are unable to pay contact our tax debt team on 1300 368 710 or +61 2 3814 0266.
If you are currently in the middle of a payroll tax audit and have concerns about your ability to pay any additional debts identified, please discuss your options with your compliance officer as soon as possible. The contact details of your compliance officer can be found on your audit letter or notice of investigation.
What happens if you do not pay your payroll tax?
If you have outstanding payroll tax debt and do not pay, we may:
- impose interest on the outstanding debt. This will accrue over time until payment is made. Read more about interest and penalty tax.
- issue a garnishee notice, where money is taken in payment of the debt from a third party (such as a bank, or other asset).
- lodge a caveat over landholdings
- issue a Directors Notice, where the director becomes liable for the debt incurred by the company
- seek payment from another member of the group, where the business is grouped for payroll tax purposes
- initiate wind up action.
Contact the payroll tax team
If you have questions about this topic call 1300 139 815 or +61 2 7808 6904 for international callers.
You can also email [email protected]