Australian Taxation Office named as party preventing IT contractors being paid

Exclusive Plutus Payroll has named the Australian Taxation Office (ATO) as the party with which it is in dispute and ostensibly the reason it has been unable to pay hundreds of contractors owed weeks of pay, as The Register has reported earlier this week.

An email sent to contractors and seen by The Register on Friday evening (Australia time) says “Our dispute is with the Australian Taxation Office who believe that Plutus owes the ATO money. Acting in a draconian and unfair manner, the ATO froze Plutus’ bank accounts on 27 April without prior warning or any consultation. We received no notice of intention to audit, no complaint and no other advance warning of non-compliance from the ATO. When the ATO acted, without notice, they froze our bank accounts - and we became unable to pay our contractors the money owed to them.”

The email says Plutus considered going into administration or receivership, a move that would have made out-of-pocket workers creditors who needed to pick over the company's carcass to get their money. Plutus says it tried to keep trading “to do the right thing by our contractors and fight for the right to pay you what you were owed”.

It added:

Since that time, we have implored the ATO to allow us to release the funds so that we could pay you. We went further and agreed that the ATO could retain all of the other bank account funds - if they would just agree to let us pay you, while the dispute could be considered by the Courts.

Plutus says its beaks had spent five days “vigorously protesting on your behalf” but “the ATO has this evening refused our request. And exhausted our patience”.

The payroll company said it was seeking an urgent hearing in Australia's Federal Court to get access to its bank accounts and said it hoped it could get before a judge on Monday. That shouldn't be a problem, as Australia's courts have provisions to quickly hear matters in which parties will benefit from swift consideration.

Plutus pulled up the shutters on April 27 and this is the first substantive news from the company. It's also the first time the company has acknowledged the stress the situation is causing its customers: the email says it will go to court so it can “… finally pay our contractors, ending their hardship and stress - which we contend has been directly, unnecessarily caused by the ATO’s extraordinary, aggressive exercise of their powers – done without warning and certainly without any consideration of the hardship caused for everyone affected by their actions.”

The email also says “Plutus unequivocally denies the ATO’s claim and will vigorously fight the matter through the objection process and the Courts” and says that as the case unfurls, evidence of its compliance with tax requirements will reach the public record.

“Sadly, this does not provide the resolution to the issue facing you today. We would have preferred to bring news of a more positive outcome. However, we assure you our position is unchanged - we continue to do everything in our power to resolve our dispute and make good on our commitment to pay you the monies you are due.”

The letter's not gone down well with those owed money by Plutus, who have set up a closed social media group in which to discuss their plight.

“Is it just me, or does anyone else find it hard to believe that ATO would freeze an entit[y']s account just on a whim,” writes one member. “In my opinion, there is no smoke without fire.” ®