Posts Tagged ‘Phoenixing’

  • New hotline for phoenix whistleblowers

    The Federal Government has set up a new Phoenix Hotline for whistleblowers to combat increasing phoenix activity by dishonest directors and their companies.

    Illegal phoenixing schemes are costing the economy an estimated $2.85 billion to $5.13 billion a year, according to a government report.

    From July 2017 to March 2018, the government’s Phoenix Taskforce conducted 263 audit and review cases involving phoenix behavior and secured seven convictions, raising $240 million in liabilities, with $115 million in cash already collected and returned to the community.

    Phoenix behaviour has long been a problem across a range of local industries, including printing. “Nothing provokes such an intense reaction in the printing industry as the phoenix,” wrote former Print21 editor Simon Enticknap back in 2014. “The merest hint of a company using the liquidation process to avoid paying its debts and carry on as normal is enough to raise the ire of honest, hardworking printers.”

    ‘It’s only a matter of time before the law catches up with them’: Kelly O’Dwyer, Minister for Revenue and Financial Services.

    Minister for Revenue and Financial Services Kelly O’Dwyer says the Phoenix Hotline will make it easier for whistleblowers to report suspected phoenix behaviour directly to the Australian Taxation Office (ATO) under the protection of national privacy laws.

    “It will enable timely action to be taken against companies and their directors, safeguarding employee entitlements like wages and superannuation, and ensuring taxes are collected for Government to provide the essential services Australians rely on,” said O’Dwyer.

    Employees, creditors, competing businesses and the general public can provide information or report their concerns about possible phoenix behaviour by calling the Phoenix Hotline on 1800 807 875 or online at the Australian Taxation Office website.

    O’Dwyer says the hotline builds on the work of the Government to deter phoenixing, including the announced introduction of a director identification number, new phoenix offences, new clawback powers for ASIC, the extension of the director penalty regime, addressing corporate misuse of the Fair Entitlements Guarantee Scheme, the establishment of the Phoenix Taskforce in 2014, new laws to target the non-payment of superannuation entitlements, reforms that will prevent GST fraud through phoenixing in the precious metals industry and the construction sector, as well as reforms to target black economy activities.

    “The Turnbull Government has shown its commitment to taking tough action against fraudulent behaviour like phoenixing. For those who try to beat the system, it’s only a matter of time before the law catches up with them,” says O’Dwyer.

    For Business owners

    The ATO says if you own a business, look out for any of the following behaviours from a company you are working with:

    A competitor is offering significantly lower quotes or you are given a quote that is lower than market value.

    The directors of a company you are working with have been involved with liquidated entities.

    A company you are working with requests payments to a new company.

    Recent changes of company directors and name, but the manager and staff remain the same.

    For employees or contractors

    If you’re working for a company, look out for these warning signs that your employer is involved in an illegal phoenix operation:

    You don’t receive a payslip.

    The company ABN and name changes, but the phone number or address stays the same.

    Your superannuation or other employment entitlements are not being paid.

    Your pay is late, less than what it should be or you are being paid under the minimum wage.

    Your payslip records a different employer name to whom you believe you work for.