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Company Director Penalty Regime – Important Changes

As from 29 June 2012 company directors may be subject to automatic personal liability with respect to unpaid PAYG withholding and superannuation guarantee obligations. The changes apply retrospectively from the date of commencement of the legislation and will:

  • expand the director penalty regime to include superannuation guarantee charge amounts meaning that directors will also be held personally liable for their company failing to pay employees’ super contributions;
  • ensure that directors cannot have their director penalties remitted by placing their company into administration or liquidation when unpaid Pay As You Go (PAYG) withholding or superannuation guarantee amounts remain unreported and unpaid three months after the due date (including existing unreported amounts);
  • restrict access to PAYG withholding credits for company directors and their associates where the company has failed pay withheld amounts
  • new directors will become liable to a director penalty for company debts 30 days after they become a director

If you are the director of a company with employees you should familiarise yourself with the changes as they directly impact your obligations and responsibilities under the tax law in respect of employee entitlements.

Importantly, as a company director you need to ensure all activity statement (BAS/IAS) obligations are up to date, together with your reporting and payment obligations in relation to the Superannuation Guarantee Charge.

Please contact us if you are unsure how these changes affect you and your company

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