The ATO has issued a release on 3 convictions for illegal phoenix operations. The 3 men were alleged to have established multiple labour hire companies to provide workers to vineyards, fruit and vegetable growers, and meat processers around South Australia and in Queensland. The companies failed to remit both GST and PAYG withholding to the ATO, despite charging their clients GST and including figures supposedly withheld for PAYG on employee payslips. Across 6 entities, the trio allegedly withdrew more than $23m over a 25-month period, leaving the entities cashless at the time of liquidation to enable the recovery of outstanding tax debts.
It was also alleged that the trio attempted to hide their illegal activities by appointing shadow directors for the companies, exploiting their relationship with employees or acquaintances living in Australia, at least 3 of whom were on student visas.
One of the men, identified as the “instigator and architect of the scheme” was sentenced to 8 years imprisonment while the other 2 were sentenced to 4 and 5 years. [LTN 176, 13/9/21]
[Tax Month – September 2021] 3.10.21