Increase in companies wound up by Tax Office Becoming more aggressive in winding up businesses: The ATO. The Tax Office is becoming more aggressive in winding up businesses, as it seeks to claw back revenue to help bolster the federal budget. Figures compiled for Fairfax Media show the ATO is responsible for more than half of the cases put before the courts seeking to wind up a company. New jobless figures show the economy remains soft with total employment falling by around 10,000 last month. Even with the drop, the unemployment rate remained at 5.7 per cent. The proportion of businesses being chased by the ATO has grown significantly since the global financial crisis. Around half of the 1365 companies served wind-up notices in the past three months were due to the ATO, according to court filings seen by Fairfax Media. Many of these wind-up applications were against small to mid-sized businesses, which represents the biggest employers through the economy. In mid-2008 this figure was closer to 27 per cent. Most ATO actions are due to companies not paying GST or tax and super on behalf of employees. When other government entities such as WorkCover and state revenue offices are added to the mix, the percentages of government-initiated wind-up notices balloon to more than 65 per cent. The Reserve Bank this week cut interest rates by 25 basis points for the second time this year as it tries to transition the economy for life after the mining boom. At 2.5 per cent, the cash rate is a record low. An ATO spokeswoman said the Tax Office takes legal action, including wind-up proceedings, to collect debts where taxpayers are unwilling to work with the Tax Office, continually default on agreed arrangements, or do not have the capacity to pay. However the spokeswoman contested the figures. "In 2008-09 we initiated 8 per cent of wind-ups and, based on preliminary figures, we are on track for a similar result in 2012-13," she said. Council of Small Business of Australia chief executive officer Peter Strong said the number of company collapses was due to a failure of government policy. "There is an increasing amount of stress on companies from poor competition policy particularly, and if you combine that with the high costs of rent and penalty rates and increasing compliance costs caused by red tape, many can no longer keep operating," he said. Mr Strong said many small businesses hung on during the global financial crisis but conditions had got too hard. Debt collections agency Prushka, which compiled the data, said given the parlous state of the economy, all efforts should be made to work with struggling companies. "We have found that working with defaulting companies produces a far greater recovery than winding them, provided that the business is viable and there is genuine goodwill shown by the directors to trade out of the situation," Prushka chief executive Roger Mendelson said. Figures show that two companies a day in the construction and building-related sector are collapsing, as late payments from creditors worsen, activity dries up and banks put the squeeze on funding. The latest statistics on liquidations and voluntary administrations show that between June 1 and July 18 almost 100 companies in the construction and related industries collapsed, 23 of them in Victoria, 45 in NSW and 15 in Queensland.