Recent changes to Director Penalty Notice provisions were passed by the senate on 27 June 2012. These changes will come into effect any day now, so it is important that you are aware of these changes that affect you and your business. If you have a PAYG tax debt then you may be served with a Director Penalty Notice by the ATO.  The aim of a Director Penalty Notice is to make directors liable for their company’s unpaid tax debt.

As a director, you will no longer be able to avoid personal liability for a PAYG tax debt, which comes with a Director Penalty Notice, if the following applies:

•  Your debt is older than three months and

•  Your debt was not reported to the ATO within three months of the lodgement date.

These changes bring with them serious consequences for company directors who are negligent, or simply unaware of these changes.

Other amendments to Director Penalty Notice provisions include:

•  As a director, you may also by liable for your company’s unpaid superannuation liability when you receive a penalty.

•  Directors, and associates of directors, may now also be liable for a new personal income tax liability. This will make directors and their associates potentially liable for a company’s unpaid PAYG withholding liability.

If your business has a tax debt or you have received a Director Penalty Notice it is vital that you seek professional advice immediately. There can be significant ramifications for not complying with the ATO’s notice; this can include losing personal assets such as cars, property or shares. Here at The Quinn Group our experienced team of tax lawyers and accountants are experienced in dealing with the ATO and tax debt issues. For more information on the changes to Director Penalty Notices or about other tax debts submit an online enquiry or call us on 1300 QUINNS (1300 784 667) or on +61 2 9223 9166 to book an appointment.