Earlier this month the Australian Senate passed The Treasury Laws Amendment (Combating Illegal Phoenixing) Bill 2019. A lot of attention was paid to the anti-phoenixing provisions, but the Bill runs a little deeper, specifically around the risks of directors’ personal liability for GST.
The bill has the provision that directors of companies which have a GST debt that is 3 months overdue will become personally liable for the hashtag#GST collected but not paid, adding to the liabilities facing directors when a business becomes insolvent.
The provisions to come into effect on 1/4/2020, and in order to avoid this liability directors, will need to either have the company for which they are a director pay the debt or enter into a repayment arrangement with the hashtag#ATO to repay the debt in full. If this is not possible, the directors should immediately consider appointing a liquidator or administrator to the company.
If you are an accountant, we encourage you to discuss the changes with your clients or we can come in and meet with them.
Stephen Dixon is available to present to your firm on the legislation in a CPD session. If you want to take advantage of this, please contact Stephen Dixon, Richard Rohrt or [email protected]