Last week the Government passed legislation which may make company directors personally liable for any unpaid/overdue GST of their business.
21 Day GST Director Penalty Notices may be issued by the ATO to a director if their company fails to pay GST but lodges the relevant activity statements within three months of the due dates. To avoid personally liability, within the 21 day period of the notice being issued, directors can:
- Pay the GST from the company
- Place the company into liquidation or voluntary administration.
Alternatively, the ATO can issue Lockdown GST Director Penalty Notices if a company fails to pay GST and also fails to lodge activity statements within three months of being due. In this case, personal liability cannot be avoided through bankruptcy, liquidation or voluntary administration.
The take-home message is to keep your GST lodgements and payments up-to-date, moving forward.
The new law applies to quarters commencing 1 April 2020, and is not retrospective.