ATO – DIRECTOR’S PENALTY NOTICE
Directors Be Warned
It is really important that every company director is aware of the recent changes introduced by the Australian Taxation Office and the extra legal obligations imposed on them and how they will impact you and your business. If you have a PAYG tax debt then you may be served with a Director Penalty Notice by the ATO.
What does it mean if I have a Director’s Penalty Notice?
The aim of a Director Penalty Notice is to make you the directors of your company liable for their company’s unpaid tax debt. As a director, you will no longer be able to avoid personal liability for a PAYG tax debt, which comes with a Director Penalty Notice, if the following applies:
- Your debt is older than three months and or your debt was not reported to the ATO within 3 months of the due date.
- As a director, you may also be liable for your company’s unpaid superannuation liability when you get a penalty.
- Directors, and associates of directors, may now also be liable for a new personal income tax liability. This will make directors and their associates possibly liable for a company’s unpaid PAYG withholding liability.
Do I have any choices?
Yes. If your business has a tax debt or you have received a Director Penalty Notice it is vital that you seek professional advice. We have various options you may wish to consider. Simply call us on 1300 795 575.
What if I ignore the notice?
There can be significant consequences for not complying with the ATO’s notice. This can include losing personal assets such as cars, property or shares and personal bankruptcy for the company’s debts.
My business is in trouble. Should I appoint a liquidator?
When a company director finds him or herself in an impossible financial position they are often given well-meaning advice from their accountant or financial advisor to appoint a liquidator this advice can unfortunately hurt them even further. Many people believe that because you are paying the liquidator they will look after your best interests and help you to get the business and you back on your feet. NOTHING IS FURTHER FROM THE TRUTH. A liquidators first priority in these circumstances is to themselves.
Business debt can come about very easily. A few slow months and all of a sudden the debt is a long way beyond the reach of the company owner. If you have company debts that are out of control then give us a call. At Liquidators Australia we are business debt specialists. For a completely free consultation call Liquidators Australia on 1300 795 575.