In a word, Yes. A director can be held personally liable for company tax debts – specifically:

• unpaid PAYG withholding
• unpaid superannuation guarantee payments

How can a director be liable for company tax debts?

If the ATO wishes to hold a director liable for a company tax debt, it must issue a Director Penalty Notice strattera medication.

A Director Penalty Notice may be issued to the home address of the director as it appears on the ASIC register or to the company’s tax agent address.

It is the director’s responsibility to maintain these addresses and if the notice is not received and not complied with because of the directors failure, the penalty will stand and they will not be able to avoid personal liability for a company tax debt.

The Director penalty is equal to the amount of the outstanding debt owed by the company for unpaid PAYG and unpaid super.

[youtube https://www.youtube.com/watch?v=sPlRTcDoRL0]If a person received a director penalty notice, they may comply with it so long as they achieved one of the options allowed within 21 days of the date on the notice:

• pay the debt in full
• appoint a voluntary administrator
• appoint a liquidator

If compliance is not achieved within 21 days, the director becomes personally liable for the tax debt of the company.

A Director Penalty Notice works in 2 ways

First, if all BAS & Super returns are up to date, all having been lodged within 3 months of the due date, even though there may be a debt for PAYG and superannuation, a director will be allowed 21 days grace in which to comply with the Director Penalty notice.

If compliance is achieved within 21 days, the director will avoid personal liability for the stated company tax debts.

Second, If all or some BAS & Super returns have been lodged more than 3 months after the due date for lodgement, a director will be automatically and immediately personally liable for the company tax debts.

In these circumstances, there is no avoidance of personal liability for the company tax debt.

The ATO will pursue the director for the unpaid PAYG and super debt of the company.

If a director has not lodged a return or indeed any returns, the ATO can issue an estimate of what it believes the debt is and then issue a Director Penalty Notice based on those estimates.

In short, if you are more than 3 months late in lodging your returns, you are personally liable for the amounts shown in a Director Penalty notice.