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David O'Brien: Director - Client Services
David has over 30 years experience in the accounting profession and has previously been a Partner with a large international accounting... Read more >>
Fiona McCredie: Director - Client Services
Fiona has a number of years experience working as a professional accountant providing business advisory services to clients in a variety... Read more >>
John Fisher-Stamp: Director - Client Services
John Fisher-Stamp is a Chartered Accountant and a Client Services Director of The DKM Group. John Specialises in the... Read more >>
Letitia Weatherhead: Principal - Client Services
Letitia worked in regional Queensland as a professional accountant before joining the DKM Group in 1999 and provides both... Read more >>
Mark Davies: Director - Auditing & Superannuation
Mark has a dual role at the DKM Group, leading both the Audit and Superannuation divisions. He has an... Read more >>
Michael Dowling: Director - Client Services
Michael has developed a unique combination of skills with over fifteen years in the chartered accounting profession, and more... Read more >>
Paul Symons: Director - Client Services
Paul has a wealth of accounting experience following a number of years within the banking and finance sectors. He... Read more >>
Sharon Pullen: Director - Client Services
Sharon has a number of years experience as a professional accountant providing business advice to a large and broad... Read more >>
Dale Blamire: Director - Client Services
Dale brings over 30 years experience in the accounting profession to the DKM Group. He specialises in the management... Read more >>
Denis Owens: Director - DKM Investment Services
Denis Owens is a Director of DKM Group and Managing Director of Insight Investment Services, joining the company in... Read more >>
Stephen Lennon: Director - Client Services
Steve works with a large cross section of clients on advisory issues such as business management, tax minimisation strategies... Read more >>
Greg Mallam: Director - Client Services
Greg has over 30 years of accounting experience, including 22 years as a Partner/Director of the DKM Group and... Read more >>
Directors now personally liable for withheld tax and unpaid superannuation
Changes to the Director’s Penalty Notice (DPN) regime which came into effect on 1 July mean that the Commissioner can enforce personal liability on directors for withheld PAYG and unpaid superannuation
Thursday 19 July 2012
|Directors now personally liable for withheld tax and unpaid superannuation |
19 July 2012
Changes to the Director’s Penalty Notice (DPN) regime which came into effect on 1 July mean that the Commissioner can enforce personal liability on directors for withheld PAYG and unpaid superannuation.
What does this mean for Directors?
The changes mean that when a company has outstanding PAYG or superannuation liabilities, a director can be issued a DPN which gives them 21 days to either pay the debt or appoint a Liquidator or Voluntary Administrator to avoid personal exposure.
In the case where PAYG and or super liabilities have been unreported and unpaid for three months, the Commissioner can make an estimate of the liability and hold the directors personally liable for those debts.
In addition, the Commissioner has the discretion to reduce a director’s (and their associate’s) entitlement to PAYG withholding credits from their personal income tax returns.
What process does the ATO follow?
1. The ATO issues a Director Penalty Notice (DPN) which prescribes that if the Company does not comply with the Notice company directors are held personally liable.
2. Any or all directors may be issued a notice for the full amount of the liability.
3. At the end of the 21-day notice period, the ATO may commence legal action against directors for the unpaid PAYG and/or superannuation liabilities.
How can you avoid being affected?
Directors can avoid personal liability for a DPN if the company pays its outstanding debt, or appoints a voluntary administrator or liquidator within 21 days of receiving the notice. Although this is similar to the previous regime, the key difference is directors cannot escape personal liability if a debt remains unpaid and not reported for more than 3 months after the due date.
The best way to avoid a DPN is to get on top of your lodgements and ensure PAYG and superannuation requirements are paid within 3 months after the due date.
You should also record your current residential address with the Australian Securities and Investments Commission (ASIC) to make sure you receive the DPN if one happens to be issued.
Please contact your local client service advisor with any questions you may have about these changes and the impact they may have for your business.