COVID-19: A Financial Health Perspective

March 17, 2020 Roger Blow

These are clearly concerning times from a global health perspective and entire nations are facing, in many cases for the first time in over half a decade, a genuine risk to the lives of their immediate family and close friends.

We are all receiving detailed advice and information many times a day about slowing or avoiding the spread of the virus. Indeed we risk missing the most important guidance by having to wade through so many updates and briefings on what we should and shouldn’t be doing!

But in addition to the obvious need to protect the health of our own families and the community as a whole, there is also a need to have at least some regard for other realities which, whilst not the current priority or focus, are still going to be relevant when we emerge from this crisis: jobs, income, tax liabilities, cash flow, finance, insurance, insolvency.

All of the information and signs suggest that this will be a long battle and not something that is a mere memory come Easter. The initial medical predictions put the peak of WA’s coronavirus attack most likely falling between June and August.

So as hard as it may be when every update is focused on social distancing and using antibac gel, we do also need at this time to start thinking about how we make or change plans to address the financial needs of our businesses and community. Already some industries would have been severely impacted financially by the virus measures, such as those in the events and sport sectors. Next in line will be restaurants and bars and then businesses selling luxury items or social experiences, given that belts will be tightened probably even more so than in the GFC. And we are only weeks into this story, with likely months still to go.

At Cove Legal we have specialized for many years in assisting clients with legal disputes or problems focused around either insolvency issues or outstanding tax liabilities. The advice in that space, virus or no virus, is to have the conversations early – especially where the ATO is concerned. So many damaging financial outcomes can be either avoided or lessened with early advice, action and intervention when things start to look financially uncomfortable.

We provide guidance on potential personal liability for Directors, dealing with the ATO when an individual or company is being pursued for unpaid tax debts, negotiating payment plans for tax debts, addressing garnishee notices, director penalty notices, winding up or bankruptcy proceedings and pursuing unpaid amounts under commercial agreements.

The next 3-6 months are going to be challenging for businesses both big and small and this will likely be a global economic problem. We can’t give you more advice on the health issues but if you would like to discuss a legal health check for your business then we are keen to remain as available as possible to clients.

To assist in that objective, we are now set up to conduct client meetings by either Skype or iPhone Facetime – and the old-fashioned telephone and email of course work very well.

We are also happy to offer fixed price initial consultations at $350 plus GST for up to an hour (which represents over 40% reduction to the usual fees), so that new clients can feel comfortable that they are not handing over a blank cheque. Our objective is to give you the best advice for you to then make informed decisions. Call or email us today if you think we can help.

Roger Blow P: +61 8 6381 0326 or e: roger@covelegal.com.au

This publication is not intended to provide and does not provide legal advice. You should seek professional legal advice relating to your specific situation(s) before taking any action based upon its contents.

Changes to Director Penalty Notices

July 4, 2019 Roger Blow

Since April 2019 there has been an important change to the Director Penalty Notice (DPN) regime in relation to a Director’s personal liability for an unpaid Superannuation Guarantee (SG) debt.

A Director will now be personally liable if a company’s SG liabilities are not remitted within 28 days of the end of each quarter. Previously a Director had 3 months to report their superannuation and settle the debt without the risk that the ATO would issue a lockdown DPN.

A Director who fails to lodge SG returns within the 28 day time period will cause the ATO to issue a lockdown DPN, which makes the Director automatically liable for those specific debts and prevents them from escaping liability via a liquidation/administration.

Directors should note that these changes do not alter the 3 month period allowed for the settlement of a company’s PAYG debt.

Cove Legal are experts in assisting clients with contentious tax matters and insolvency proceedings. We provide advice on ATO payment plans, director penalty notices, winders and all other aspects of ATO debt recovery action. Practice Director Roger Blow has acted extensively on behalf of the ATO in Perth and has specific expertise in tax related disputes.

Roger Blow P: +61 8 6381 0326 or e: roger@covelegal.com.au

Corporate Battle of the Bands rocks on for 10 years

January 24, 2019 Roger Blow

It’s time to rock the Corporate Battle of the Bands at the Charles Hotel on Saturday 16 February.

Cove Legal’s Practice Director Roger Blow is the founder of the competition, which this year proudly celebrates its 10th anniversary.

Cove’s band, CoveFefe, will be locking musical horns with bands sponsored by St John Ambulance, Lockton, Arup, Grain King and CIA Solutions.

All money raised, including your ticket entry price, goes to two charities, Youth Focus and Cystic Fibrosis WA. Youth Focus is a WA charity focused on combatting youth suicide and depression and helps young people every year across the State. Each year Roger rides in support of Youth Focus as part of the ‘Ride for Youth’, a cycling fundraiser travelling from Albany to Perth. More information on that charity can be found at www.youthfocus.com.au

These nights have a reputation for being great fun for both the bands and their supporters and we would love to see clients, colleagues and contacts there to support CoveFefe on the big night. Your ticket entry price of just $35 available online at the link below or on the door, gets you a whole night of live music, a live DJ between performances and The Charles’ very reasonably priced bar selection. Expect energetic performances, enthusiastic cheer squads and some questionable stage outfits!

For more info on the event check out the Facebook page at: https://www.facebook.com/corporatebotb/

To buy tickets (bring friends!) click here: https://www.rideforyouth.com.au/2019/event/corporate-battle-of-the-bands1/

Garnish*

December 5, 2018 Roger Blow

* Verb
1 decorate or embellish
2 serve notice on a 3rd party to seize money

A garnishee notice is served on a third party that owes you money (or holds money on your behalf), requiring that the third party pays some or all of that money direct to the entity issuing the notice. In recent years it has increasingly become one of the ATO’s favourite weapons to enforce the payment of outstanding tax debts.

This can include the diversion of wages owed to you by your employer, the contents of your bank accounts, proceeds of sale held by a property settlement agent or amounts owed by trade debtors.

Unlike your average creditor, the ATO does not need to seek a court order to issue and enforce a garnishee notice. You do need to be served with a copy of the notice.

If you are in the process of a court or AAT appeal in which you are disputing the assessment under which you owe the tax debt, then the ATO is required to consider whether garnishing funds would prejudice your ability to pursue the appeal. Recent case law suggests that this assessment by the ATO is at times open to challenge, as the taxpayer (and the Courts) may not always agree with the ATO’s assessment as to what will or will not prejudice the taxpayer’s capacity to address their tax appeal. We have also seen cases where garnishee notices have been improperly issued against joint bank accounts concerning individual debts – so the issue of a notice is not always the end of the story. Call us if you would like any further help in addressing a garnishee notice.

Roger Blow

P: +61 8 6381 0326 or e: roger@covelegal.com.au