Personal liability for directors with respect to GST

From 1st April 2020 directors can now be personally liable for GST under certain circumstances. Personal liability has also been extended to Unpaid Luxury Car Tax (LCT) and Wine Equalisation Tax (WET).

How can you become liable?

Where a company’s BAS has not been lodged, or it has been lodged more than 3 months late, you will become automatically liable for the unpaid GST, WET and LCT. If you haven’t lodged the BAS then the ATO can estimate the liability. You will become personally liable under either scenario. The ATO can then issue a Director Penalty Notice (DPN) to collect the taxes from you personally.

A director can only avoid personal liability if:

1. The company lodged the BAS on time or within 3 months of its due date: and
2. Within 21 days of the DPN being issued by the ATO, you either paid the amount listed in the DPN or you placed the company into voluntary administration or liquidation.

How can I protect myself as a Director?

It is crucial for company directors to have processes in place to ensure that your company’s BAS are lodged on time and that you are complying with all of your obligations under the Corporations Act at all times.

If you would like to know more on how these new laws may affect your company and your liabilities as a director then act immediately by seeking help from professionals. Call Australian Company Liquidations on 1800 981 070 for a FREE initial consultation now.