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Plutus Payroll enters administration after $165M tax fraud investigation

Plutus Payroll enters administration after $165M tax fraud investigation

Questions remain over contractors' entitlements

(AFP)

(AFP)

The payroll company that left local IT contractors waiting for wages after it turned up at the centre of a $165 million tax fraud investigation has been placed into administration.

David Ianuzzi and Vincent Pirina from Veritas Advisory were appointed as joint administrators of Plutus Payroll Australia on 6 June, just weeks after the alleged director of the company was arrested in the far reaching tax fraud case.

According to Veritas Advisory, the voluntary administration will allow for an independent insolvency practitioner to take control of, and investigate, the affairs of the company. During that time, all creditor claims are to be put on hold. 

The appointment comes three months after the Australian Taxation Office (ATO) froze the accounts of the outsourced payroll management service, leaving hundreds of IT contractors around the country without wages for weeks.

Plutus Payroll, which focused heavily on the IT industry, was subsequently identified as being allegedly at the centre of what has been described as the largest tax fraud investigation by the Australian Federal Police (AFP) in the country’s history.

According to the AFP, the company was allegedly being run by several members of a syndicate alleged to be responsible for the multimillion-dollar tax fraud against the Australian Government.

The AFP arrested and charged nine people on 17 May for their association with the syndicate.

Plutus Payroll’s alleged director, Simon Anquetil, was arrested following his return to Australia on 18 May, and was the 10th person to be arrested as a result of the investigation.

It subsequently emerged that Anquetil had reportedly been engaged in phoenix activity and alleged fraud during his time at his former IT company, EStrategy Group.

While the AFP has alleged that the fraud revolved around Plutus Payroll, it stressed that the company is, in fact, a legitimate business that provided payroll services to its legitimate clients.

However, the money received from the client companies was allegedly transferred to subcontracted companies – alleged to be controlled by syndicate members – to process payroll.

While processing these payments, funds paid by legitimate clients to service tax obligations were allegedly diverted by the syndicate for their own personal gain.

It remains to be seen whether IT contractors on Plutus Payroll’s books will receive all of their entitlements, such as superannuation, even if they receive the wages owed to them.

In late May, however, the ATO released guidance confirming that workers who had been on Plutus Payrolls’ books will not be penalised when their pay as you go tax withholding (PAYGW) amount reported as being withheld is not actually paid to the ATO.

At tax time, the amounts withheld from applicable contractors’ pay will be applied when their income tax liability is assessed, the ATO said. 

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Tags Plutus PayrollSimon AnquetilATOIT contractorAFP

More about AFPAustraliaAustralian Federal PoliceAustralian Taxation OfficeFederal PoliceVeritas

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