If your company has fallen behind on it's PAYG withholding tax, the Australian Taxation Office is looking very closely at you. Not the company, but you, the Director.
Under the Director penalty regime, Directors are personally responsible for unpaid superannuation guarantee and PAYG withholding amounts. In addition, if a Director is personally entitled to a tax credit, the ATO may offset this credit against the company's liability.
Last month, the ATO started contacting Directors of companies with unpaid PAYG withholding obligations. This is the first step in the process – voluntary compliance. If these amounts remain unpaid for three months, the Commissioner will issue a Director's penalty notice. If the liability remains after 21 days, the penalty applies – even if the company is placed into administration.
If a company is experiencing difficulty paying its tax liability, it is important for the Directors to address the issue. Often the ATO will work with a company to put in place repayment schedules.
It is also worthwhile talking to your accountant if you're unsure of where you stand. Contact us on 02 9957 4033 for more information.
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Last updated May 2013. This article is provided for information purposes only and should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.
This article is provided for information purposes only and correct at the time of publication. It should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.