Director penalty notices have been around for a long time. However, recently the ATO have moved to strengthen their scope – meaning that existing directors or newly appointed directors could be held personally liable for unpaid PAYG Withholding tax and Superannuation Guarantee. This can mean your personal assets are at risk!
PAYG Withholding is the tax that is withheld from an employee’s pay and remitted to the ATO. Superannuation Guarantee is the compulsory 9.5% employer contributions paid on a employees salary.
If you are a director of a company that has employees and wish to avoid this problem, you should review your PAYG withholding and super payments to ensure that your company is meeting these obligations. If you are not, areas that are deficient should be rectified as soon as possible.
If you are offered a directorship with a company that has employees, the current advice is that you make documented enquiries about the company’s PAYG withholding and super obligations before accepting the role. This is evidence the ATO will rely on when assessing a newly appointed director.
Should you have any queries on the above please contact our office.
This article appeared in our October 2017 newsletter