Get ASX Price


Liability limited by scheme approved under Professional Standards Legislation

Latest News
Hot Issues
How is your super going, ready for retirement?
ATO increasing data exchange with international regulators
Illegal SMSF early access scheme leads to $6,000 fine
Our 'hardest' SMSF tasks
Uber drivers hit for 10% tax
Lack of literacy promotes unrealistic goals
Taxpayer failed to prove that payments were “loans”
New STP dates confirmed as ATO goes on compliance blitz
ATO flags compliance project for FY17/18
Items that heat up your depreciation deductions
Doing a budget is a good idea but ....
Government ‘undermines’ tax system in new moves on property expenses
Taxpayer denied deduction for work expenses of $60,000
Overtime meal expenses disallowed because no allowance received
Key Economic Indicators, 2017
Government to shut down salary sacrifice loophole
Crowdfunding legislation gets greenlight
ATO heavyweight responds to hacking fears
Checklist - Individuals Tax Returns - 2017
Checklist - Tax time 2017 - Company, Trust & Partnership
Checklist - Superannuation Funds - 2017
ATO to ramp up scrutiny of $20K tax break use
‘Bank-like heists’ make way for new wave of cyber crime
ATO reports on key contraventions for 2016-17
Articles archive
Quarter 2 April - June 2017
Quarter 1 January - March 2017
Quarter 4 October - December 2016
Quarter 3 July - September 2016
Quarter 2 April - June 2016
Quarter 1 January - March 2016
Quarter 4 October - December 2015
Quarter 3 July - September 2015
Quarter 2 April - June 2015
Quarter 1 January - March 2015
Quarter 4 October - December 2014
Personal insolvency numbers spike across Australia

New statistics from the Australian Financial Security Authority (AFSA) have revealed that business-related personal insolvencies are on the rise across much of the country, with one mid-tier concerned that numbers could continue to rise.



       


 


Yesterday AFSA released regional personal insolvency statistics for the March quarter 2017 in comparison to the December quarter 2016, showing increases in many of the capital cities and some regional states.


RSM’s national head of restructuring and recovery, Peter Marsden, told Accountants Daily that accountants need to ensure their clients are on top of their cash flow and business plan in order to avoid personal insolvency.


“It’s really about understanding what the business does, and then the usual tips and tricks and fundamental things that you need to do,” he said.


“One is manage your cash flow properly and pay great attention to your cash flow because ultimately your test as to whether you're insolvent is - can you pay your debts as and when they fall due.”


Mr Marsden said that the biggest single creditor that pursues people to bankruptcy and liquidation is the ATO for unpaid GST, superannuation, or tax.


“The big trap a lot of business people fall in to is that they don't pay their taxes because the ATO doesn't whinge if you miss one month’s payment, they really don't do very much about it,” he said.


“[Too often businesses] let the tax office slide and eventually you end up doing it for two or three or four months and then the numbers get so big you can't jump over it. So make sure that all those taxes are kept up-to-date. Don’t allow yourself to fall behind.”


The AFSA statistics revealed that the number of debtors who entered a business-related personal insolvency in the Greater Sydney region rose 8.6 per cent from the December 2016 quarter to the March 2017 quarter.


Conversely, the rest of NSW experienced a drop of 10.7 per cent in the number of debtors who entered a business-related personal insolvency.


The number of business-related personal insolvency debtors in the Greater Melbourne region and the rest of Victoria rose 5.7 per cent and 8.3 per cent respectively.


The Greater Brisbane region saw an increase of 13.9 per cent in the number of business-related cases, with the rest of Queensland experiencing a 2.1 per cent drop.


Business-related personal insolvencies increased in the Greater Adelaide region and the rest of South Australia, rising 9.8 per cent and 108.3 per cent respectively.


The Greater Perth region saw no change to the number of business-related personal insolvency cases, while the rest of Western Australia saw an increase of 9.1 per cent.


The number of business-related personal insolvencies rose 84.6 per cent in the ACT, remained unchanged in Tasmania, and fell 18.8 per cent in the Northern Territory.


Looking ahead Mr Marsden said further increases are possible given the current situation in the property industry and the “historically low” interest rates.


“There's a lot of talk about what is going to happen in the property industry and housing in particular and what's going to happen there. Any downward movement in that is going to disaffect a lot of small businesses that use properties they own as security for their loans from the bank,” he said.


“The other problem we've got is there are a lot of businesses in the economy who are holding on but not doing much better than that, so any upward movement in interest rates is probably going to lead to an increase in insolvencies.”




LARA BULLOCK
Friday, 26 May 2017
www.accountantsdaily.com.au




16th-June-2017
 

Agostinelli Perlen
Phone: (03) 9654 2022 // Fax: (03) 9654 2044 // Email: info@agpe.com.au

Disclaimer | Privacy Statement