Changes to Director Obligations
Note: The ATO has reminded company directors of recent changes to the law affecting their personal liability for certain company obligations.
On 29 June 2012, changes were made to the tax laws to reduce the scope for companies to engage in fraudulent ‘phoenix activity’ or to escape liabilities and payments of employee entitlements.
- extend the director penalty regime and the estimates regime to apply to unpaid superannuation guarantee charge (SGC);
- ensure that directors cannot avoid director penalties by placing their company into administration or liquidation when PAYG withholding or SGC remains unpaid and unreported 3 months after the due date; and
- in some instances, make directors and their associates liable to ‘PAYG withholding non-compliance tax’ – which effectively reduces directors’ PAYG credit entitlements where the company has failed to pay amounts withheld to the ATO.