March 2015 Newsletter 

In this edition:

Welcome

New ATO data matching programs

Potential ban on direct borrowing for SMSFs

Protect your family from life's surprises

New ATO powers to protect employee's superannuation entitlements

Protect your family from life's surprises

by Debbie Adams

The ATO has new powers, known as Superannuation Guarantee Estimates (SGE), designed to protect employees' superannuation entitlements before companies try to liquidate and avoid their responsibilities – behaviour the tax office describes as phoenix activity.

According to the Australian Securities & Investments Commission, phoenix activity involves the intentional transfer of assets from an indebted company to a new company to avoid paying creditors, tax or employee entitlements. The SGE powers allow the ATO to step in where they see likely phoenix activity, make a reasonable estimate of the company's superannuation obligations and raise a debt pertaining to these obligations on the company before it can be put into liquidation.

The ATO can also issue director penalty notices which make directors personally liable for the company's unpaid superannuation obligations. The ATO has already used these new powers to recover eight million dollars in worker's superannuation entitlements from the operators of labour-hire companies in South Australia and Victoria who have engaged in phoenix behaviour.

The ATO has warned employers that tackling phoenix behaviour is a key focus of the ATO and that they are quite open to employee's dobbing in employers in these situations.