SIRA joins Phoenix Taskforce

notice | 26/04/2017

SIRA has partnered with state and federal agencies to stamp out illegal phoenix activities.

Phoenix behaviour is when a business deliberately liquidates itself to avoid paying taxes, creditors and employee entitlements.

Unlike the mythical phoenix however, these businesses disappear in a ball of debt, not flames, only to rise again from bankruptcy, having shed their arrears and adopted a new guise.

In addition to the many other serious issues these practices create: unfair competitive advantage; non payment of wages, entitlements and suppliers; loss of government revenue; and increased monitoring and enforcement costs.

SIRA is concerned about the avoidance of regulatory obligations related to workers compensation.

Phoenix activities for example, can occur when businesses without workers compensation are dealt penalties but abscond to avoid payment.

Likewise, a business may fold because of other debts and leave their workers compensation unpaid in the process.

The Phoenix Taskforce was established by the Australian Tax Office (ATO) to protect government revenue, business and employee entitlements.

The taskforce's main priorities are to deter and prosecute illegal phoenix activity through collaboration and information sharing and to make legislative changes that reduce the financial viability of phoenix activities.

As a result of the taskforce, SIRA is lawfully empowered to receive information from the ATO and to carry out ABN checks so that when a business initiates liquidation, SIRA is mobilised to engage debt collection processes.

If you are a business working with other businesses, an employee or contractor and you suspect someone is or has conducted illegal phoenix operations, report your concerns.

Ensure you are up to date with your workers compensation and return to work obligations.