Garnishee Notice

What is an ATO Garnishee Notice?

The ATO can recover company tax debts by issuing a Garnishee Notice pursuant to Section 206-5 of the Taxation Administration Act 1953. The Garnishee Notice allows the ATO to collect outstanding tax debts by taking monies from the company’s bank account or directly taking monies from the company’s customers.

The ATO first issues a ‘Notice of Intended Legal Action/Garnishee Notice’ so that directors are aware of the ATO’s intention of action.

Before the ATO issues a Garnishee Notice, the following factors are taken into consideration:

• the financial position of the taxpayer and steps taken to make payment in the shortest possible timeframe;
• the extent of any other debts owed by the taxpayer;
• whether the revenue is placed at risk because of the actions of the taxpayer; and
• the likely implications of issuing a notice of a taxpayer’s ability to provide for a family or to maintain the viability of a business

What should you do if you have received an ATO ‘Notice of Intended Legal Action/ Garnishee Notice’?

A Garnishee Notice can cause a significant impact on a company’s cash flow so it is important that the issue is dealt with immediately.

The options available to directors are:

• Pay the tax debt if the company is solvent; or
• Call us immediately on (02) 9231 0505 to provide you with FREE advice and assist you with your options