Directors Personal Liability
The recent budget has announced a number of changes to the directors personal liability regime.
From 1 July 2011, the major effects of these proposed changes (still awaiting release of legislation) are as follows:
- Directors will become personally liable for unreported and unremitted Superannuation and PAYG withholding Tax by operation of law three months after the due date.
- Returns must be lodged regularly to avoid liability. This regular lodgement will allow the ATO to properly monitor delinquent debts and pursue repayment in a more timely manner.
- Directors may not receive a Director Penalty Notice which has in the past provided them with a window to seek advice on the financial position of the company before becoming personally liable for company debts.
- In certain circumstances directors and associates of the directors will be prevented from obtaining credit for withheld amounts in their individual returns where the company has failed to pay withheld amounts to the ATO.
In contrast to the honeymoon period provided by the ATO during the Global Financial Crisis, the ATO have been pursuing a more aggressive collection process for the last twelve months and will continue to do so