Legislation has been passed in Parliament to include GST in the Director Penalty Notice regime and is effective from 1 April 2020.

Following on from our email of last week, a Director Penalty Notice (“DPN”) is a notice the Australian Taxation Office can currently send to a Director that can make you personally liable for:
Pay As You Go (“PAYG”); and
Superannuation Guarantee Charge (“SGC”)
And from 1 April, you can add Goods and Services Tax (“GST”) to this list, meaning the
ATO will be able to pursue a company Director personally for the majority of a company’s tax debt.

The legislation states the ATO’s powers to pursue GST is forward reaching only, meaning the ATO will only chase GST debts incurred from 1 April 2020, or later, with a DPN.

It is our understanding that the 3 month lockdown rules that applies to PAYG will also be applied to GST. The current rules state that if PAYG was reported more than 3 months after the due reporting date, then the DPN is locked down, which means placing the company into Administration or Liquidation will not remove the penalty.

What happens now?
Make sure you report PAYG, Super and GST on time, even if you cannot pay it.