GARNISHEE NOTICES - YOUR RESPONSIBILITIES
07 02 2007
GARNISHEE NOTICES - YOUR RESPONSIBILITIES
Most Insolvency Practitioners that we speak with believe that the use of Garnishee Notices by the ATO is on the increase. The Garnishee Notice enables the Commissioner to recover tax debts from third parties owing money to, or holding money for, the Tax Office debtor.
That third party may be YOU, as the accountant, holding money for your client who owes money to the ATO.
Therefore the following are some things that you need to be aware of should you be served with a Garnishee Notice:
- the Commissioner may take action against you if you refuse or fail to comply with a Garnishee Notice.
- this action may be to order you to pay the amount sought by the Garnishee Notice.
- the service of a Garnishee Notice on you creates a Statutory Charge over the monies held by you on behalf of the third party to the Tax Office debtor to the extent of the debt owing to the ATO.
- the charge created does not rank ahead of an existing fixed charge but does rank ahead of any floating charge that has not yet crystallised at the time of the serving of the Garnishee Notice.