Tech contractors could soon be paid as Plutus Payroll admits ATO has 'important and vital role'

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Plutus Payroll, which hasn’t been able to pay out wages to thousands of tech contractors due to the Australian Taxation Office freezing its accounts, dramatically changed its stance towards the government agency on Monday night.

After calling the ATO’s actions “draconian”, “unfair”, “aggressive” and “extraordinary” on Friday night, the company changed its tone on Monday after it started legal action in the Federal Court and continued negotiations to have the funds released.

“As a good corporate citizen, Plutus acknowledges that the ATO has an important and vital role in Australia to ensure that companies are compliant and that employer contributions, taxes and superannuation are paid, for the long term benefit of all Australians,” the company stated on its website.

“As previously advised, we believe that we have been compliant with these obligations but also appreciate that the ATO has a role in play in checking and ensuring compliance of all companies and individuals in Australia.”

The conciliatory tone was accompanied by the news that contractor payments could be released soon, with both Plutus and ATO reportedly now placing that as a higher priority in “good faith” before resolving their own dispute.

“Presently, we are providing further information to the ATO about the amounts that are due to you. Plutus and the ATO are hopeful that a practical resolution and payment of those amounts can be made in the coming days,” read the statement.

“Today we appreciate that the ATO shares our concern that our contractors, as third parties to our dispute with the ATO, are not disadvantaged while we work through the resolution of that dispute.”

The company called the change in events “positive” and “encouraging” and also hinted the court action may have subsided, saying the two parties would resolve the dispute through the ATO’s “internal objection process” after contractor payments have been sorted out.

Monday’s statement is a stark contrast to last week when the under-siege payroll service provider accused the ATO of freezing the bank accounts on April 27 “without prior warning or any consultation”.

“We received no notice of intention to audit, no complaint and no other advance warning of non-compliance from the ATO,” the company stated at the time.

The saga started suddenly on Monday last week when Plutus Payroll stripped its website of content and posted a single message saying its operations had been halted “due to a commercial dispute”. Out of its total base of 4,000 contractors, 1,000 to 2,000 people are reportedly owed money.

The company for several days refused to divulge the nature of the dispute, leading to speculation about it going into administration or receivership. On Friday evening, Plutus admitted that its battle was with the ATO and announced its intentions to take the matter to court on Monday.

The ATO declined to comment on individual cases to Business Insider on Monday, while the Federal Court hearing yesterday was adjourned to Wednesday morning.

Plutus Payroll has maintained that only payments due on April 27 to May 2 inclusive had been withheld. However, some contractors, through direct contact with Business Insider and on internet forums, have said they are owed money going back a fortnight, a month or even two months.

In response, a Plutus spokesperson told Business Insider last week that those people may be “citing legitimate and normal course of business issues with pay” but was definitely not affected by the current commercial dispute.

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