Directors' personal liability extended
- make directors personally liable for their company’s unpaid superannuation guarantee amounts; this is in addition to being personally liable for unpaid PAYG Withholding amounts;
- ensure that directors and associates cannot avoid their obligations by placing their company into administration or liquidation when PAYG Withholding or superannuation guarantee remains unpaid and unreported three months after the due date;
- in some instances, make directors and their associates liable to PAYG Withholding non-compliance tax where the company has failed to pay amounts withheld to the ATO; i.e. a director and associate may be prevented from claiming PAYG Withholding credits in their own income tax returns if personal liability is imposed. This extends to former directors where PAYG Withholding was unpaid during their period of directorship.
These measures are in addition to the pre-existing directors’ duty to prevent insolvent trading by their company, or risk being held personally liable for all the debts of the company incurred during the period of insolvency.
If you are a director of a company that is facing cash flow shortages, is struggling or unable to pay PAYG Withholding tax, GST or superannuation guarantee or creditors, please contact your Ruddicks adviser immediately to discuss the best course of action and avoid becoming personally liable for the company’s debts.