Outcome
Vale Legal assisted the client to present a comprehensive and compelling application to the Australian Taxation Office achieving remission of more than $136,000 in General Interest Charge (GIC). The submission demonstrated that the interest had accrued as a direct result of exceptional circumstances beyond the client’s control, including prolonged regulatory action that ultimately failed. As a result, the client was able to place before the Commissioner a clear, well‑supported case for full remission, relieving significant financial and commercial pressure at a critical time.
Customer
The client was an Australian proprietary company operating in the building sector. The business had traded for many years, employing staff and delivering major projects within a highly regulated industry. The directors sought legal assistance after the company accrued substantial tax interest during a period of sustained financial disruption, regulatory scrutiny, and litigation that placed severe strain on cash flow and access to finance.
Problem
The ATO imposed General Interest Charge totalling approximately $136,305 on outstanding GST, PAYG withholding and other tax liabilities. These charges accrued while the business was subject to investigation and subsequent court proceedings that ran for several years. As a result of the proceedings, the business lost trade credit insurance, supplier accounts were closed, and commercial lenders refused to provide finance. At the same time, the company incurred legal defence costs of approximately $358,000 and faced industry‑wide disruption, including the economic impact of COVID‑19 and a fundamental regulatory ban affecting its core product. Although all court charges were ultimately withdrawn, the accumulated interest remained, creating a risk of serious financial hardship even after the underlying tax debts were cleared.
Solution
Vale Legal prepared a detailed written submission to the Commissioner of Taxation seeking remission of the GIC under section 8AAG of the Taxation Administration Act 1953. The application was carefully structured around the ATO’s Receivables Policy and Practice Statements, addressing each statutory ground for remission. Vale Legal demonstrated that the payment delays were caused by factors beyond the taxpayer’s control, that the directors had taken all reasonable steps to mitigate the effects of those circumstances, and that it was fair and reasonable — and otherwise appropriate — for the interest to be remitted. This included evidence that the client continued to meet its lodgement obligations, engaged constructively with the ATO, and ultimately secured high‑interest private finance when no commercial loans were available in order to pay the primary tax liabilities as soon as the court proceedings concluded.
Testimonial
“Vale Legal took the time to understand the full background of what our business had been through. Their advice was practical, clear and highly strategic, and they presented our position to the ATO with real care and precision. We felt supported and confident knowing the matter was in expert hands.”
