Parliament is currently considering legislation to include GST in the Director Penalty Notice Regime, and it could come into effect as soon as January 1 2020.
A Director Penalty Notice is a Notice that the Australian Tax Office (“ATO“) can send to a director that can make that director personally liable for, currently, two types of tax debts of a company – Pay As You Go (“PAYG“) and Superannuation Guarantee Charge (“SGC“) liabilities. The addition of Goods and Services Tax (“GST”) to this list means the ATO will be able to pursue a company director personally for the majority of a company’s tax debt.
The current draft of the legislation makes the new powers to pursue GST forward reaching only – so historical debts will not be affected. But this may change! Back in 2012 when the ability for the ATO to “Lock Down” a DPN for PAYG, it was applied retrospectively, so there is a precedent there.
Our reading of the current draft says the same 3 month lockdown rules that currently apply to PAYG will be applied to GST as well. But again, this is still before parliament and may yet be amended before it is passed.
The current lockdown rules state that if PAYG was reported more than 3 months after the due reporting date (or not at all) then the DPN is “Locked Down” which means placing the company into Administration or Liquidation will not remove the penalty.
So What Should You Do?
The general rule is make sure you report PAYG, Super and now GST on time, even if the company can’t pay it.
If your client has received a DPN, call us for a free appraisal of your options. Send us a copy of the notice and our advisors will walk you through step by step what each part means. Act Fast! If you have a DPN the clock is ticking! The timer actually starts when they send it, regardless of whether you’ve received it or not.
Please contact our office for more information
+ 61 3 9823 3366
Roseby Rosner & Young is a Certified
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