PAYG & Super Obligations for Directors

Is your company struggling to meet PAYG or SGC tax payments? If you’re the director, the ATO will be looking at you closely. And not at your company but at you personally.

Penalties for Directors

Designed to stop companies avoiding their tax liabilities & employee entitlement payments, the Director Penalty Regime means that directors are now personally responsible for unpaid superannuation guarantee and PAYG withholding amounts. The director is also entitled to a tax credit which the ATO may offset against the company’s liability.

What Happens if the Company Falls Behind on PAYG and SCG Payments?

If you’re company is struggling to meet its tax obligations it’s important to inform the ATO. They will often put a payment schedule in place that suits your business.  However, if you simply cease payments, the ATO will contact you to request voluntary compliance. If the amount owed is not paid within 3 months of the due date you will be issued a Director’s Penalty Notice. The penalty applies if the liability remains within 21 days of issue of the notice. This penalty still applies if your company is placed into administration. If you would like more information or advice on director’s tax obligations please feel free to contact us! __________________________________________________________________________________

The information in this document reflects our understanding of existing legislation, proposed legislation, rulings etc as at the date of issue. In some cases the information has been provided to us by third parties. While it is believed the information is accurate and reliable, this is not guaranteed in any way. Any advice in this publication is of a general nature only and has not been tailored to your personal circumstances. Please seek personal advice prior to acting on this information.