Miscellaneous 2019

Statutory demands: Practical points for tax practitioners

Source: Taxation In Australia Journal Article

Published Date: 1 Jun 2019


Tax agents are often appointed as the registered office of a corporate client and, from time to time, receive statutory demands sent by creditors addressed to their client requiring payment of a debt. The tax agent's receipt of the statutory demand constitutes effective service on the client company, giving the company strictly 21 days to respond. If the tax agent fails to inform the client of the demand, it may prejudice the client's ability to respond to it, with the consequence that the creditor may apply to the court to wind up the client in insolvency. In these circumstances, the client may look to their tax agent for the loss and damage caused by the agent's oversight in a claim for negligence. This article discusses some fundamental aspects of the statutory demand scheme, suggests some practical tips, and highlights the critical need for tax agents to promptly alert their clients to the receipt of a demand and to recommend legal advice.

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Scott Morris

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Miscellaneous 2019

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