You are using an older browser version. Please use a supported version for the best MSN experience.

Dodgy business sparks raids in Qld, Vic

AAP logoAAP 11/08/2016

Self-proclaimed pre-insolvency 'specialists' who allegedly help collapsing businesses from paying tax and employee entitlements have been raided in Queensland and Victoria.

ATO and ASIC officers swooped on 13 homes and businesses, mainly in suburban Melbourne and the Gold Coast, on Wednesday and Thursday.

The raids were part of an investigation into pre-insolvency advisers who allegedly encourage and help businesses on the brink of insolvency to commit illegal phoenix activity.

Phoenix activity is when a company deliberately liquidates to avoid paying creditors, taxes and employee entitlements.

The firm has also allegedly helped collapsing businesses get out of paying GST and tax on $22 million of unreported income.

ATO Deputy Commissioner Michael Cranston said some pre-insolvency firms appeared to be cold calling businesses nearing collapse and offering them advice for a fee and sometimes even providing "dummy directors".

Mr Cranston said said the "self-proclaimed specialists" operated in an unregulated environment and urged businesses to be careful when taking insolvency advice.

"If you do get approached by pre-insolvency firms, make sure you get the right advice," he told AAP.

"It might be unlawful and you might be facing strong civil penalties or be subject to ATO or ASIC investigations, or even potentially criminal investigations."

The raids were triggered by complaints from the tax profession and legitimate insolvency practitioners as well as intelligence gathered by the cross-agency Phoenix Taskforce.

Phoenix activity is a major problem in Australia, costing the economy an estimated $3.2 billion each year.

image beaconimage beaconimage beacon