This piece was written and provided by Alares.
Insolvencies in April remained 50% above pre-pandemic levels as the ATO continues to work through the record amount of outstanding tax debt. This is increasingly driving small businesses into small business restructuring plans (SBRs) and larger businesses into voluntary administrations (VAs).
Key highlights in April
- Insolvencies still 50% above pre-COVID levels.
- Continued high uptake of small business restructuring.
- The ATO remains the key risk driver.
Insolvencies in April remained 50% above pre-pandemic levels
This continues the trend from February and March, showing the long-anticipated ‘catch up’ in insolvencies from the pandemic lows.
Small business restructuring appointments continue their strong increase, amid mounting pressure from the ATO
Small businesses are increasingly turning to SBRs as the ATO continues its drive to recover outstanding tax debts.
SBRs continue to account for a growing percentage of all insolvencies
SBRs in April accounted for ~14% of all insolvency appointments.
The ATO remains active in Court recoveries
In addition to director’s penalty notices and disclosing business tax debts, the ATO remains active in the Courts.
Similarly, the big four banks remain vigilant with Court recoveries
While overall numbers are slightly down since the February peak, Court actions filed by the big four banks remain above historical levels.
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Patrick Schweizer
Director, Alares
w: www.alares.com.au
e: patrick@alares.com.au
m: +61 418 739 921
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