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14 March 2019

Ombudsman concerned with number of ATO garnishees

The number of ATO garnishee debt-recovery notices released each day, as reported in the Acting Inspector-General of Taxation and Taxation Ombudsman’s (IGTO) review, is of great concern to the Australian Small Business and Family Enterprise Ombudsman.

“When a garnishee is issued on a small business, funds are removed from the business’s bank account,” Ombudsman Kate Carnell said.

“This means the business may not be able to pay staff and suppliers and will probably cease to trade.

“As the report states, inappropriate use of garnishee notices can severely affect a small business’s cash flow. It is a very serious matter.

“Given the draconian nature of the notices and the lack of judicial or other external oversight of notices before release, they should be used only as a last resort … if at all.

“We are pleased the IGTO did not uncover a concerted ATO ‘cash grab’ on small businesses or a link between debt staff personal performance and placement of garnishee orders.

“And we welcome agreement by the ATO to the IGTO recommendations that will help improve existing systems to anticipate problems rather than responding to problems as they become known.

“My office continues to research historical cases of early debt recovery by the ATO, which will include the consideration of garnishee orders.

“If you are a small business owner affected by early debt recovery by the ATO and your case is not currently before the Administrative Appeals Tribunal, contact my office at or call 1300 650 460.”