From 1 April 2020, Company Directors can now be personally liable for unpaid GST.
This new law does not apply to GST liabilities that have accrued prior to 1 April 2020 and follows the Director Penalty Notice Regime that applies to PAYG Withholding and Unpaid Superannuation. Directors automatically become personally liable for outstanding obligations for PAYG and GST if a Company fails to lodge their ATO obligations (i.e. BAS or IAS) within three months of the due date.
This new legislation was introduced under a package of reforms to deal with illegal phoenix activities. Illegal phoenix activity occurs when assets of a Company are stripped and transferred to another entity that is controlled by the same Director, for little or no consideration, with the main purpose to defeat creditors in the first company.
The life of a Director and Business owner can be stressful at times. We recommend you reach out to the team at MKS Group on 03 9374 8400 to discuss if you feel like your Business needs help with understanding and lodging your BAS and fulfilling your superannuation obligations. We also encourage you to undertake a review of your ASIC records to ensure all Director details and addresses are correct.