This paper provides a practical insight into the rights, obligations and entitlements of companies and their directors when insolvency is looming. It considers when a proactive approach is warranted in dealing with the taxman's debts, and the consequences of adopting a ‘head in the sand' attitude. The paper focuses on real life situations affecting SMEs in the Global Financial Crisis and covers:
- tricks and traps for negotiating tax debts with the ATO
- when personal liability attaches to directors for unpaid tax debts, and how to ensure personal liability does not arise
- the (few) circumstances under which the ATO enjoys a priority over unsecured creditors.