Parliament has just passed legislation to include GST in the Director Penalty Notice Regime, and it comes into effect on 1 April 2020.
A Director Penalty Notice is a Notice that the Australian Tax Office (“ATO“) can send to a director that can make that director personally liable for, currently, two types of tax debts of a company – Pay As You Go (“PAYG“) and Superannuation Guarantee Charge (“SGC“) liabilities.
The addition of Goods and Services Tax (“GST”) to this list means the ATO will be able to pursue a company director personally for the majority of a company’s tax debt.
The legislation makes the new powers to pursue GST forward reaching only so the ATO can only chase GST debts incurred in the period starting 1 April 2020 or later with a DPN.
Make sure you report PAYG, Super and now GST on time, even if the company can’t pay it.