Director Penalty Notice – Take Heed

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Director Penalties

Mike Taylor at Money Management, says accounting firm RSM Bird Cameron has issued a caution to Company Directors that they need to make themselves aware of changes to Director Penalty Notices, which include changes to Pay As You Go (PAYG) and Superannuation obligations. 

The company said changes to the Director Penalty Notice regime within the Income Tax Assessment Act 1997 are now imminent, after being passed by the House of Representatives and the Senate on 27 June 2012.

It said the changes would have a significant impact on Director liabilities, particularly in the current economic environment where a significant number of insolvent companies have either long overdue PAYG withholding contributions tax obligations and unpaid employee superannuation entitlements.

The RSM Bird Cameron analysis said the legislative changes would mean:

  • If a PAYG withholding debt is over three months old and has not been reported to the Australian Taxation Office, the Directors will be unable to avoid personal liability through the usual means of making a formal insolvency appointment;
  • In some circumstances, Associates of the Director may also be personally liable; 
  • Significantly, unpaid superannuation liabilities will now also be covered by the regime. 

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