TAX OFFICE: The ATO has moved to shut down Len Smith Carpet Court. 


Photo Naomi J. Matthews
TAX OFFICE: The ATO has moved to shut down Len Smith Carpet Court. Photo Naomi J. Matthews Naomi J. Matthews

ATO tries to shut down popular Gladstone business

JOBS are on the line at a Gladstone business after the Australian Taxation Office moved to shut it down

Australian Securities and Investments Commission documents reveal the Deputy Commissioner of Taxation has applied for a "winding up order" of Gladstone CC Pty Ltd, which is trading under the name Len Smith Carpet Court, Fairwork documents state.

But despite the ASIC notice stating that Carpet Court's fate would be decided this Friday, Andrew Johnson, a consultant for the business, said the company had arranged to settle the dispute outside of court.

>>Sacked Gladstone salesman fights for redundancy

"The application is being adjourned by consent of the ATO," he said. "And negotiations to resolve the matter are well advanced."

"The ATO tries hard to work with regional businesses to preserve jobs and resolve taxation disputes." 

Carpet Court Gladstone.
Carpet Court Gladstone. Mike Richards GLA311216COURT

The ATO declined to comment on the case and would not reveal the reasons for its action and what its case involved.

"The ATO cannot comment on the tax affairs of any individual or entity due to our obligation of confidentiality under the law," an ATO spokeswoman said.

Gladstone man Len Smith, the former owner of Len Smith Carpet Court, told The Observer that he sold Len Smith Carpet Court in January, 2005, and has no dealings with the business. 

"I've written to them once and I've spoken to one of their directors on a number of occasions asking them to remove my name from the business," he said.  

LATEST DISPUTE: The ATO has moved to shut down Len Smith Carpet Court.
LATEST DISPUTE: The ATO has moved to shut down Len Smith Carpet Court. Contributed

The latest action comes after a series of setbacks for Len Smith's Carpet Court.

A second ASIC notice released in January last year reveals that David James Hambleton, acting as liquidators of MP No.2 Investments, attempted to shut down Len Smith Carpet Court on November 25, 2015.

"The company was previously successful in defeating this application," Mr Johnson said.

PAST DISPUTE: A liquidator of another business made an application to wind up Len Smith Carpet Court, but it was defeated.
PAST DISPUTE: A liquidator of another business made an application to wind up Len Smith Carpet Court, but it was defeated. Contributed

Len Smith Carpet Court is also battling claims at the Fairwork Commission from former salesman Kevin MacInnes, who claims he is owed a redundancy after being laid off.

Raymond Jack, the director of Gladstone CC Pty Ltd when Mr MacInnes was sacked, claimed the company wasn't required to pay a redundancy, as it had fewer than six employees at the time.

Under the small business code, a business employing fewer than 15 people is exempt from paying redundancies.

FAIRWORK: A former worker claims Len Smith Carpet Court owes him a redundancy.
FAIRWORK: A former worker claims Len Smith Carpet Court owes him a redundancy. Contributed

But Commissioner Susan Booth ruled that because Mr Jack was also a director of Mackay Carpet Court, Maryborough CC and CC Qld Holdings, all of the businesses should be considered as one entity.

"In summary, I am satisfied the four corporate entities are associated entities on the basis of the common ownership, directorship, and capacity to control the outcome of decisions," Commissioner Booth said.

"But the mere fact they are associated entities does not resolve the underlying question: was there fewer than 15 employees at the relevant time? If so, the employer was a small business employer and there would be no entitlement to redundancy."

She then ordered Mr Jack to produce staff numbers of the four business, of which she said would be used to determine if a redundancy needed to be paid.



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