Tax

ATO hits back at MissChu after being blamed for its demise

Cara Waters /

The Australian Tax Office has fought back against claims by Nahji Chu, the founder of Vietnamese food chain Miss Chu, that the ATO is to blame for the collapse of her business. 

 

Read more: MissChu founder Nahji Chu: How the ATO cost me my business

 

The Sydney operations of MissChu were placed in voluntary administration just days before Christmas but Chu told SmartCompany MissChu wouldn’t have collapsed if the ATO had granted her request for more time to pay her tax bill.

Chu asked the ATO to grant her a three-month extension to her tax bill to allow her to open two new MissChu outlets in Double Bay and Balmain in Sydney.

“[The new stores] would have allowed me to pay my bills but the Tax Office didn’t see it that way,” Chu says.

But an ATO spokesperson says businesses must comply with their tax obligations before committing money to ventures such as new stores.

The ATO does not usually comment on individual cases but a spokesperson for the Tax Office contacted SmartCompany in relation to Chu’s claims saying taxpayers experiencing difficulty should contact the ATO.

“Over 95% of Australian taxpayers pay their tax on time or shortly thereafter,” the spokesperson said.

“Where some businesses occasionally experience short-term cash flow issues, we work closely with them to provide support and assistance to address their issues.”

The spokesperson says this can include organising payment arrangements to address outstanding debts.

The ATO confirmed it has provided payment arrangement support to MissChu.

“From time to time we do see situations where a business withholds money from employee wages for their taxes, and then chooses to spend this withheld money elsewhere without fulfilling their tax obligations,” the spokesperson says.

“This creates an uneven playing field and allows that business to gain an unfair advantage over those businesses that pay their taxes on time.”

Chu has attracted criticism for hiring a public relations company after the collapse to run a social media campaign #weneedchu to attempt to save the business.

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Cara Waters

Cara Waters is a former SmartCompany editor. Previously, Cara was a senior reporter for the Financial Times' website and worked for The Sunday Times in London.

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