The scenario is a client has been avoiding your calls for a number of months, the ATO is starting to increase it’s contact and the notices are being ignored. The client calls after a garnishee notice, what can you do?
In our experience, the garnishee notice will be one of the first times that your client will address their issues but a few other issues may occur at this time.
The initial discussion with your client should be around what the consequence of this notice is, and what steps will need to be immediately take place.
- Their Bank may cease honouring direct debits – an initial and often overlooked concern is that the bank account may be frozen from any direct debits, this can be a significant risk for small businesses with multiple credit lines.
- The garnisheed funds may cause a significant cash flow shortfall. The general experience is that the garnishee is on a Friday, before wages are processed and after the final deposit for the week. For most businesses this will be time that the bank account will be at its highest.
- A customer of your client may be served with a garnishee notice as well. It is becoming more common for the ATO to garnishee major clients as well as the bank accounts, this can cause significant reputation and business damage.
- Staff may be made aware of the garnishee notice either through being served the notice at the business or having restricted access to the bank account.
Dealing with a garnishee notice is something that requires immediate steps to ensure that the damage is limited and the business (if viable) is able to continue. Our team has extensive experience in handing the garnishee notices and can be anywhere on the Eastern seaboard within 24 hours, contact us if you need guidance.
The team at C&D Restructure and Taxation Advisory are here to help. As part of the Vault Group we can offer the full suite of financial products and advice to help you navigate the business landscape. Schedule a meeting here via Calendly or give us a call on 1300 1 VAULT (1300 182 858)
Latest posts by Craig Dangar (see all)
- ATO Goes into Overdrive to Collect Debt - June 24, 2022
- SMSF Fraud Is Continuing to Rise - June 20, 2022
- The Collapse of ProBuild and Condev Highlights Concerns About The Futures of Many Australian Construction Companies - June 17, 2022
- Tips For Developing A Purpose Driven Business - June 1, 2022