Director Penalty Notices
Director Penalty Notices, legislation proposing amendments to the director penalty notice provisions was passed by the House of Representatives and the Senate on 27 June 2012.
Once given Royal Asset it will have far reaching consequences on directors of companies that owe the Australia Taxation Office outstanding pay-as-you-go (PAYG) withholding deductions.
The legislation provides that a director will no longer be able to avoid personal liability if their company has a PAYG debt or unpaid superannuation guarantee amounts, when the following applies:
(a) the debt is older than 3 months; and
(b) the debt was not reported to the ATO within 3 months of the lodgment date.
It appears that the only way a director can avoid personal liability for the debt in these circumstances, and the action which must be taken within the 3 month period is to either:
- place the company into liquidation; or
- place the company into voluntary administration; or
- cause the debt to be paid.
Whilst the legislation provide for certain defences, they are very narrow and difficult to apply.