Will the Australian government’s “single touch payroll proposal” create more insolvencies?

19/03/2015 by Michael Jones

The Australian government announced measures to cut red tape for business and to provide a simplified payroll system that would mandate or a “single touch payroll system” The Australian Taxation Office (ATO) is currently conducting a consultation process in order to examine the consequences of this measure and has called for submissions from stakeholders. Under “single touch payroll”, employers will be required to electronically report payroll and super information to the ATO (Australian Tax office) when employees are paid, using standard business reporting – enable software. This is different to the current situation where employee tax deducted from payroll is reported in the em

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Superannuation a useful way to protect personal assets of individuals

20/05/2013 by Michael Jones

It is true that superannuation funds are ordinarily protected property in the event that an individual becomes bankrupt. There is however and exception to this general principle where a superannuation contribution has been made to defeat the creditors. In particular Section 128 B of the Bankruptcy Act makes specific provision in relation to transfers of property to a super fund where it can be inferred from all of the circumstances that at the time of the transfer, the transferor was or was about to become insolvent. The kinds of transactions envisaged by these provisions relate to unusually large and irregular payments that are outside of the normal scope of the individual’s contributi

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Protecting Inherited Personal Assets In the event of Bankruptcy

06/05/2013 by Michael Jones

One issue that frequently arises in relation to the administration of bankrupt estates is the difficulty of the bankrupt being a beneficiary under a Will. Divisible property is defined broadly in the Bankruptcy Act and it includes, not only property owned by the bankrupt at the time of the bankruptcy, but also property acquired by the bankrupt after bankruptcy up until the time of the discharge, which is usually three years. This is referred to as “after acquired property”. . . .

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Asset Protection for Directors and Business Owners

by Michael Jones

Antecedent transactions Business owners are often anxious about what might happen to their private assets should their business runs into difficulties and ultimately fail. Many individuals contemplate transferring private property into some form of entity separate from the individual (such as a company or a trust), or transferring the property to a close relative or friend in the hope that if something untoward happened to them creditors would not be able to access the property. Unfortunately the Australian Bankruptcy Act anticipates this kind of conduct and in certain circumstances affords provisions for a subsequent Bankruptcy Trustee to reverse the effect of a transfer. In

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Personal Insolvency – A Potted Summary

18/03/2013 by Michael Jones

This is a very basic summary of the current regime in Australia applicable to personal insolvency and Bankruptcy of Individuals . . .

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ATO – Insolvency and the Tax Man Jekyll & Hyde

13/12/2012 by Michael Jones

The title of this paper is named after the character created by Robert Louis Stevenson commonly known today as “The strange case of Dr Jekyll and Mr Hyde”.  The Jekyll and Hyde description usually refers to a person with a split personality, one good and one bad.  So it is that in many cases the Australian Taxation Office (The ATO) seems to have a Jekyll and Hyde approach when it comes to tax payers who are unable to pay their debts due to insolvency. WHY IS THE ATO THE CENTRE OF ATTENTION When businesses get into financial difficulty, cash flow becomes extremely tight.  The simple principle is that the noisy cog gets the oil, thus employees are paid before critical suppliers, c

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Signs of Business Stress

13/04/2010 by Michael Jones

1) General (i)  A Statistical Approach A review of the Bankruptcy (Personal Insolvency) and Corporate Insolvency statistics reveal some interesting fundamentals about the movement of Insolvency in the Australian economy.  Surprisingly Personal Insolvency seem to be decreasing from a peak in 2009, current figures seem to be stabilising at 2008 levels.  The 2009 peak appears to have been the result of a continued sustained rise since at least 2005 and there is evidence that this pattern of sharp increases has been a feature of the Personal Insolvency statistics since at least 1988. It is clear from an analysis of the Personal Insolvency statistics that the vast majority of Personal In

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