The proposed changes are summarised as follows:
- Increasing the director penalty system to include superannuation guarantee amounts;
- Ensuring that directors cannot have their director penalties remitted by placing their company into Administration or Liquidation when unpaid and unreported three months after the due date; and
- Restricting access to PAYG withholding credits for company directors and their associates where the company has failed to pay withheld amounts to the Commissioner of Taxation.
The draft legislation released by the Treasury Department back in May lead us to believe that ANY unpaid PAYG or Superannuation Guarantee debt still unpaid 3 months after the due date would attract the new un-remittable director penalty.
This is not the case.
As long as PAYG and Superannuation Guarantee debts are reported within 3 months of the due date, a Director Penalty arising from the debt CAN be remitted by initiating a liquidation or administration within the 21 day notice period.
The new legislation could be law within two weeks so the significance for your clients (or company directors) is: if your company has an unreported tax debt more than 3 months old, you need to get your company into liquidation ASAP to avoid un-remittable personal liability.
Call us today on 02 9633 3333 for further advice and assistance.