Tech contractors left unpaid by the “suspension” of activities by Australian company Plutus Payroll finally have the prospect of good news, after the firm strongly hinted at conciliation with the Australian Taxation Office (ATO) and started talking to its customers again.
In an email sent to affected contractors and shared to a private social media group – and seen by The Register – the company said: “We are pleased to report that the ATO is working with us in good faith towards a resolution whereby all our contractors can be paid.”
The email said:
We would have preferred to have had the opportunity to address the ATO's concerns before they took the action they did - so that we could have better protected your interests. But today we appreciate that the ATO shares our concern that our contractors, as third parties to our dispute with the ATO, are not disadvantaged while we work through the resolution of that dispute.
Presently, we are providing further information to the ATO about the amounts that are due to you. Plutus and the ATO are hopeful that a practical resolution and payment of those amounts can be made in the coming days. This positive turn of events is encouraging and we commit to continuing to provide you with updates as we work through the details of this practical resolution.
That group also features an account of a Plutus official contacting the group's moderator to explain that the company and the ATO have negotiated in recent days, and that both parties hope to resolve the matter swiftly so that contractors can be paid.
That resolution could come as soon as Wednesday, as the company has secured a hearing in Australia's Federal Court on Wednesday, May 10th, at 10:00AM. Comments in the social media group suggest Plutus and the ATO hope that hearing will rubber-stamp an agreement rather than seek adjudication on the dispute.
But it appears Plutus's woes are far from over. The Register is still receiving mail from affected contractors. One said his contract had been terminated due to the situation. Others said employers had stood them down for one or more days as they did not want workers on their books when they were under a cloud. The Register has also received approaches from rival payroll companies. Numerous emails we've received, and posts to the closed group, came from folks who have moved to a Plutus rival. Even if the company pays contractors, it may not have many left on its books.
The Register asked the ATO about the circumstances under which it would freeze bank accounts. The agency said it does not comment on individual cases, but said: “We're committed to supporting taxpayers who want to do the right thing, and preventing those who don't pay from gaining an unfair financial advantage.”
The agency said it “will use stronger action” when entities:
- "are unwilling to work with us
- repeatedly default on agreed plans
- don't have the capacity to pay and don't take steps to resolve their situation
- have been subject to an audit where deliberate avoidance was detected and payment avoidance is continuing
- appear to be engaging in phoenix activities (that is, using liquidation to avoid financial obligations without risking assets and with the intention of resuming business operations through a new entity).
Plutus's Monday email still offered no hint about the source of the dispute, but it did offer a paragraph in which the company “acknowledges that the ATO has an important and vital role in Australia to ensure that companies are compliant and that employer contributions, taxes and superannuation are paid, for the long term benefit of all Australians”.
It added: “As previously advised, we believe that we have been compliant with these obligations but also appreciate that the ATO has a role in play in checking and ensuring compliance of all companies and individuals in Australia.” ®