Illegal Phoenixing

What is Illegal Phoenixing?

Illegal phoenix activity is when a new company is created to continue the business of a company that has been deliberately liquidated to avoid paying its debts, including taxes, creditors and employee entitlements.

This illegal phoenix activity impacts the business community, employees, contractors, the government and environment, including:

  • Non-payment of wages, superannuation and accrued employee entitlements
  • Getting an unfair competitive advantage over other businesses
  • Non-payment of suppliers
  • Loss of government revenue and increased monitoring and enforcement costs
  • Avoidance of regulatory obligations.

Phoenix activity doesn’t just impact those people directly affected. It deprives the whole community of necessary funds that could have contributed to hospitals, roads, education and other essential services.

 


The ATO are committed to stamping out this activity and prosecuting
the worst offenders to the full extent of the law.

 

Employees and Contractors

If you are working for a company, look out for these warning signs:

  • 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.

 

These may be warning signs that your employer is involved in an illegal phoenix operation. We encourage you to protect yourself by taking the following steps:

  1. Call your super fund and make sure your superannuation is being paid
  2. If your employer changes their name or information on your payslip, or you are being paid irregularly – ask why. You can also call the Fair Work Ombudsman
  3. Do an online search to check for any negative coverage.

 

Article sourced from: https://www.ato.gov.au/General/The-fight-against-tax-crime/Our-focus/Illegal-phoenix-activity/