KP Carmody & Co

The Government will soon introduce a unique Director Identification Number (“DIN”) to combat illegal phoenix activity and to curb the activities of pre-insolvency advisors who will also be targeted and potentially held liable for their advice.

As part of the reforms, the Government is consulting on widening the scope of directors’ personal liability to include GST liabilities as part of the Director Penalty provisions.

It is likely that personal liability for unpaid GST will operate in a similar way to current Director Penalty Notices that currently affect only unpaid PAYG and Superannuation. That is:

• If a Director does not report by lodging a BAS return within 3 months of the due date for lodgment, there will be an automatic personal liability for a Company’s unpaid GST debt as well as its unpaid PAYG and Super debts.

• Where a Director does report within the 3 month window, they will be able to avoid personal liability for the various company tax debts provided the Company is placed into liquidation with 21 days of the date on the Director Penalty Notice.

The Government’s consulting on Personal liability for directors with unreported and unpaid Company GST debts is a significant development that all directors must be made aware of.

The advice in this article is general in nature and you should consult your solicitor for specific advice