Do you have a Tax Debt? Have you a Superannuation debt?
Law changes will extend personal liability and risk
Presently a Director Penalty Notice only relates to unpaid PAYG – Pay As You Go withholding tax.
These amounts are the taxes withheld from employee wages and entitlements that should be remitted to the ATO by the company.
How the law could change
Legislative changes currently being proposed would see the DPN regime extended to include unpaid compulsory Superannuation Guarantee payments.
Other proposed law changes could also have a significant impact on many directors. For instance, it’s proposed that if a PAYG or Super debt remains unreported and unpaid for three months after the Lodgment Day for a return, a director will automatically become personally liable for that debt.
This means that if a director fails to lodge returns, placing a company into Liquidation or Voluntary Administration will not avoid personal liability (as it does presently).
What does all this mean?
Essentially, even if your company is unable to pay its debt, it must report any debt by the lodgement of all returns within three months of the lodgement date.