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  • ATO collects more than $500 million from illegal phoenix operators

    The Australian Taxation Office (ATO) today announced it has collected more than $500 million in revenue for the Australian community as a result of audits of illegal phoenix operators since the Phoenix Taskforce started in November 2014.

    The successful result comes as the Australian National Audit Office (ANAO) released their report Addressing Illegal Phoenix ActivityExternal Link today.

    The ANAO examined the effectiveness of the Phoenix Taskforce in combating illegal phoenix activity, focusing on governance, strategies, processes and performance measurement.

    The annual direct impact of illegal phoenix activity is estimated to cost the Australian community between $2.85 billion and $5.13 billion.

    ATO Deputy Commissioner Will Day welcomed the ANAO’s report.

    “The ATO agrees with all three of the ANAO’s recommendations and we’re already taking steps to implement the necessary changes in line with the ANAO’s recommendations”, Mr Day said.

    The Phoenix Taskforce comprises 34 Federal, State and Territory government agencies, including the ATO, Australian Securities and Investments Commission, Department of Jobs and Small Business the Fair Work Ombudsman and Australian Border Force. The Taskforce takes a whole-of-government approach to combating illegal phoenix activity.

    “We see illegal phoenix activity all over the country in many industries and locations. Illegal phoenix operators have a devastating impact on the community, including businesses, employees and contractors. It also means that state and federal governments can’t invest as much on initiatives that benefit all Australians,” Mr Day said.

    Illegal phoenix activity is particularly prevalent in major centres in building and construction, labour hire, payroll services and security services. It is also particularly prevalent in regional Australia in mining, agriculture, horticulture and transport. The Phoenix Taskforce is focusing on intermediaries who promote or facilitate illegal phoenix behaviour.

    “We note the comment from the ANAO that the Phoenix Taskforce is making progress against its purposes and goals in combating illegal phoenix activity. We put this down to our collaborative, whole-of-government approach,” Mr Day said.

    “We are also grateful when ordinary Australians help us identify phoenix operators for the benefit of all. If you see the warning signs and suspect illegal phoenix activity, you are encouraged to call the phoenix hotline on 1800 807 875.”

    The ANAO noted that taskforce strategies and enforcement activities as well as increased exchange of information exchange and law reforms have strengthened the compliance powers of taskforce agencies.

    “We have developed sophisticated data matching tools to identify, manage and monitor suspected illegal phoenix operators. We support businesses who want to do the right thing and will deal firmly with those who choose to engage in illegal phoenix behaviour.” Mr Day said.

    “Investigation of illegal phoenix activity is complex and time consuming. Civil and criminal matters typically take many years to finalise. So it’s very rewarding for our teams to see a successful prosecution as we saw with the six-year jail term of Benjamin Ensor in January”, Mr Day said.

    Mr Benjamin Ensor was a Manly-based luxury property developer who was sentenced to six years’ jail in the NSW District Court for goods and services tax (GST) fraud relating to illegal phoenix activity in the property and construction industry. He was also ordered to pay reparations of more than $1.8 million.

    There is more information about illegal phoenix activity, including warning signs to look out for, where to go for help, and results of the Phoenix Taskforce at ato.gov.au/Phoenix

    Phoenix activity warning signs for employees

    Employees should look out for these warning signs which may indicate that their employer is involved in an illegal phoenix operation:

    • 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. You can now look up your superannuation entitlements on MyGov. If your employer has implemented Single Touch Payroll, your superannuation payments will now be listed with your other taxation details.
    • 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 the one whom you believe you work for.

    If employees notice these signs, you should:

    • call your super fund and make sure your superannuation is being paid
    • 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 for advice
    • do an online search to check for any adverse coverage.

    Phoenix activity warning signs for business owners

    • Business owners should look out for these warning signs which may indicate that a business they are working with may be involved in an illegal phoenix operation:
    • a competitor is offering significantly lower quotes or you are given a quote that is lower than market value
    • the directors of a company you are working with have been involved with liquidated entities
    • a company you are working with requests payments to a new company
    • recent changes of company directors and name, but the manager and staff remain the same.

    If a business notices these signs, you should:

    • confirm the entity is registered and its Australian business number (ABN) is valid at abr.business.gov.au
    • visit asic.gov.au and search the ASIC Connect registers to ensure the company you are working with is a registered entity and if it is in liquidation or external administration
    • ask for references
    • do a credit check on the entity
    • complete an online search on the company and its directors for any adverse media reports.

    Note to journalists: Video asset: “Protect yourself from illegal phoenix activity”External Link

    Last modified: 29 Mar 2019QC 58445