A popular West Australian bakery has gone under owing the Australian Taxation Office $2 million.
Barretts Bakery, which won over customers with its bread, pastries and cakes, was recently placed under the control of Worrells’ principal Mervyn Kitay.
The administrator was appointed on July 27, a notice published by ASIC revealed.
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Barretts started as a small operation in 1998 and grew to become a “Perth staple” with branches in Claremont Quarter, East Victoria Park, Mount Hawthorn, Karrinyup, Joondalup and Perth CBD.
But its future is now uncertain with the baker currently owing the ATO $2 million.
Kitay said the tax bill was a legacy debt, with the business’ retail and wholesale operations cruelled during COVID.
If a company-rescuing restructure is not worked out, there have been inquiries about the business being put up for sale.
Otherwise, it could be liquidated.
Kitay told 7NEWS.com.au the government’s revenue collection agency had become more aggressive in its action to see non-compliant companies settle their scores now that the height of the pandemic is in the rearview mirror.
Part of that, according to the corporate insolvency and restructuring expert, was an increase in director penalty notices – a “powerful weapon” that makes senior management personally liable for tax and super obligations.
“If your company does not pay certain liabilities by the due date, we can recover these amounts from you personally as a current or former company director,” the ATO warned previously.
The ATO issued more than 17,000 penalty notices during 2022-23, and Kitay said his agency had received a big increase in the number of businesses chasing advice on what to do next.
An initial meeting of Barretts’ creditors was held on Tuesday.
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