UPDATE: Director Penalty Notices for Unpaid GST

We have previously written about the proposal by the Federal Government to make Director Penalty Notice provisions apply to GST. The legislation making these changes was passed by both houses of Parliament on 5 February 2020.

Provisions relating to GST Director Penalty Notices will commence the Quarter after the legislation receives Royal Assent, meaning they will likely apply from 1 April 2020. The provisions are not retrospective, meaning that directors can only be liable for unpaid GST incurred from 1 April 2020 onwards.

Director Penalty Notices for GST will apply in the same way as they do for PAYG Tax, that is there will be:

21 Day GST Director Penalty Notices

21 Day GST Director Penalty Notices will apply if a company fails to pay GST but it lodges activity statements within three months of the due dates. If this applies then the ATO can issue a Director Penalty Notice, but the directors can avoid liability by:

  • Causing the GST to be paid;
  • Placing the company in liquidation; or
  • Placing the company in voluntary administration.

Lockdown GST Director Penalty Notices

Lockdown GST Director Penalty Notices will apply if a company fails to pay GST and also fails to lodge activity statements within three months of being due. In these circumstances the ATO can estimate a company’s GST liability (if necessary) and issue a Director Penalty Notice making the director(s) automatically liable for the company’s unpaid GST.

Contact us for advice and assistance 

If your company has a tax debt or unpaid GST, even if it is not a debt you can be personally liable for under the current Director Penalty provisions, you should still seek professional advice. So please contact the Pearce and Heers’  Brisbane or Gold Coast office for an initial, obligation free consultation.

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We’re happy to answer any questions you may have, so please don’t hesitate to call us and schedule a consultation.

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