ATO update regarding the ‘Director Penalty Regime’
The release of this ATO fact sheet follows a number of recent cases involving directors being largely unsuccessful in arguing why penalties under the director penalty regime should not apply to them.
The ATO has issued a new fact sheet aimed at helping directors (and those that are about to become a director) understand their obligations under the Director Penalty Regime in respect of unpaid and unreported Pay As You Go (‘PAYG’) and Superannuation Guarantee Charge (‘SGC’) amounts.
- Directors will be personally liable for unpaid PAYG withholding or SGC amounts.
- Director penalties can apply even if an individual is no longer a director of a company, or is a newly-appointed director.
- The ATO is likely to issue a director penalty notice to collect company debts where the company hasn’t engaged to resolve outstanding obligations.
- Payment is the only option to remit the penalty if the associated company liability was not reported within three months of the due date (e.g., if an SGC statement was required to be lodged by 28 August, but this had still not been done by 28 November).
- The ATO recommends that address details with the ATO and ASIC are kept up to date to ensure any time-sensitive action can be taken by impacted directors.