The ATO have reminded taxpayers that on 1 July 2012, changes were made to the tax and superannuation laws to reduce the scope for companies avoiding liabilities and payments of employee entitlements.
Commencing in late April 2013, the ATO will now be sending letters to directors of companies that have unpaid pay as you go (PAYG) withholding amounts!
The letter will explain to the director’s their obligations and personal risk in relation to their company’s PAYG withholding debt.
It encourages directors to ensure their company addresses the outstanding PAYG withholding debt either by paying it immediately or establishing with the ATO an agreed payment arrangement (and then sticking to it).
We strongly encourage anyone who is a director of a company, especially directors who tend to take a less active role in the company’s affairs including whether they believe the company is a low risk or not, to ensure they are fully aware of how the company stands in relation to its tax obligations. Because if it turns out the company is not meeting its obligations, you very likely will become personally liable and an argument of “I was not aware” will be no defense at all!
We can advise we have already seen a number of directors receive notice of personal liability over recent months and once things reach that stage they become very difficult, and very costly, to address.
If you have any concerns or doubts regarding your company, please contact us so that they may be help before it is too late.