As a company director you have a legal responsibility to make sure that your company meets the PAYG – pay as you go withholding and the SGC – superannuation guarantee charge obligations. If you fail to meet the PAYG withholding and the SGC liability by the due date, you will become personally liable for a penalty that is equal to the unpaid amount. When a SGC liability or PAYG withholding stays outstanding, the Australian Taxation Office (ATO) will issue a director penalty notice. But even without issuing a director penalty notice, Australian Taxation Office will collect the penalty by other means like tax refund or withholding.
So, if you receive a director penalty notice and do not know what to do, contact a reliable business taxation company that can help you avoid liquidation. Every professional and trustworthy accounting business company can offer you a wide range of solutions before going out of business. Such accounting advisers will help you try salvage your business and will help you protect your assets and incomes streams away from the ATO penalties.
Remitting The Penalty
The director penalty notice will be remitted if you pay the company’s outstanding amount at any time. The director penalty notice will also be remitted if, at any time or before the given grace period (before the end of the 21st day from the day the director penalty notice was issued to you):
- your company has gone into liquidation or a voluntary administration
- your company had reported its SGC liabilities and PAYG withholding to ATO within 3 months of the due date.
In case you as a director fail to pay the penalty within the grace period which starts from the day when the director penalty notice is issued, you will be personally liable for the unpaid PAYG or SGC with no exceptions. This means that ATO can commence actions against you as a director personally, so you can even lose your personal assets including your house, cars, investment property, etc. Unfortunately in some cases this could lead to bankruptcy. Therefore, if you receive a director penalty notice, you must act immediately in order to avoid personal liability. In order to achieve this, contact a reliable insolvency experts for expert advice about director penalty notice specifics.