ATO Garnishee Notices in VAs

It has recently come to ARITA's attention that in a number of voluntary administrations, the ATO has continued to enforce garnishee notices served on debtors prior to the appointment.

The enforcement is not only against debtors outstanding as at the date of appointment, but also in respect of debts that continue to arise as a result of the administrator's trade-on of the business.

This can have significant ramifications for practitioners and cash flow during a trade on. It is important that you determine whether the ATO has served any garnishee notices on the company's debtors prior to your apppointment. This may impact your decision to continue to trade.

ARITA is in discussions with the ATO regarding their position and will keep members advised.