You’re probably aware that under the current Director Penalty Notice regime the ATO can hold a director of a company personally liable for outstanding PAYG deductions. What is not well known is that there is legislation being considered in parliament now that will substantially expand those personal liability provisions. And make no mistake: this is a very significant move towards automatic director personal liability for company PAYG and Superannuation Deduction liabilities.
To make it easy to let all of your clients know, I’ve written an Information Sheet designed for those clients who are a little lazy in lodging their BASs. You can download it as a pdf here: Director Information Sheet.
If you just want the info without our branding, here are the key points:
- Current Director Penalty Notice provisions remain – these changes are additions;
- In addition to liability for PAYG withholding amounts, directors can be personally liable for their company’s Superannuation Guarantee amounts;
- Where a PAYG or Super debt remains unreported and unpaid for three months after the Lodgment Day for a return, a director becomes automatically personally liable for that debt;
- The ATO can proceed to recover that debt/penalty from the director(s);
- Therefore, putting a company into Liquidation or Voluntary Administration after the three months has expired doesn’t avoid the personal liability (under current legislation the penalty could be avoided if the company was placed into liquidation within the 21 day notice period).