ATO expected to unfreeze IT contractor payments

Plutus Payroll, the outsourced payroll provider that last week suspended operations in light of a dispute with the Australian Taxation Office, has advised unpaid contractors the ATO has agreed to unfreeze the payment operator’s bank account and release withheld wages, following legal action taken by Plutus on Monday.

“Plutus Payroll is very pleased to advise that the ATO has agreed to allow the release of the wages owed to our contractors.  The ATO has written to the Commonwealth Bank today to ask that the funds be released,” Plutus wrote to affected clients, adding it expected money to arrive in accounts in the next 72 hours.

The reasoning behind the ATO’s sudden suspension of Plutus’ account remains a mystery, with details expected to emerge in the coming days as the case proceeds. CRN understands negotiations between Plutus and the ATO have been ongoing outside business hours, with the judge presiding over the case encouraging the two parties to “return with good news” when the case is next heard in court on Friday.

Meanwhile, Plutus told contractors it’s next priority was to ensure superannuation contributions were also paid appropriately.

“March 2017 contributions were due by 15 April 2017 and these were paid in accordance with the statutory timeframes,” Plutus said. “Contributions for the more recent pay periods are presently held in the Plutus bank account and it is our intention to continue to discuss this issue with the ATO and have these amounts paid within the statutory deadlines.”

IT contractor Joshua Miller, affected by the wage freeze, told CRN it was welcome news.

“I'm pretty relieved and I would say everyone else involved is as well. There is obviously a cloud over the superannuation but at least for now we will all be paid,” he said. “Hopefully the superannuation arrives in the next month or so.

Ross Christopher, another IT contractor affected by the ordeal, said he wasn’t too surprised at the outcome given the way the situation had escalated.

“I suspect critical funds - for instance, wages - have been released due to political pressure applied to the ATO, whilst Plutus still have a lot answer for,” he said.

“I, like all, am just glad to be paid. Fingers crossed Plutus is an innocent party as they did provide a good service.”