When payments to the ATO & liquidation collide to create personal liability

SECTION 588FGA AND DIRECTORS' PERSONAL LIABILITY FOR PREFERENCE PAYMENTS.

Formal insolvency activity has been heavily subdued since the start of COVID-primarily due to government intervention (which in simple terms put a handbrake on creditors being able to wind up a company for a period of time), the Australian Taxation Office (ATO) effectively pausing its debt collection activity, and other protectionist measures for COVID-impacted businesses coupled with a lot of government money pumped into the economy.

Now two years into the pandemic, almost all the key legislative factors impacting debt collection and insolvency have, or are about to, return to normal. And as the graph below depicts, insolvency appointments are returning to pre-pandemic levels.