DPNs for GST start 1 April 2020

Parliament has just passed legislation to include GST in the Director Penalty Notice Regime, and it comes into effect on 1 April 2020.

Director Penalty Notices To recap, a Director Penalty Notice is a Notice that the Australian Tax Office (ATO) can send to a Director that can make that Director personally liable for, currently, two types of tax debts of a company – Pay As You Go (PAYG) and Superannuation Guarantee Charge (SGC) liabilities. 

The addition of Goods and Services Tax (GST) to this list means the ATO will be able to pursue a company Director personally for the majority of a company's tax debt.

The now passed version of the legislation makes the new powers to pursue GST forward reaching only – so the ATO can only chase GST debts incurred in the period starting 1 April 2020 or later with a DPN.

Our reading of the Bill says the same 3-month lockdown rules that currently apply to PAYG will be applied to GST as well.

The current lockdown rules state that if PAYG was reported more than 3 months after the due reporting date (or not at all) then the DPN is "Locked Down" which means placing the company into Administration or Liquidation will not remove the penalty.

What Should You Do?
The general rule is to make sure you report all ATO and employee obligations on time, even if your company can't pay it. This includes PAYG, Super and GST.

The main consideration is understanding the "Lockdown" provisions i.e. if a lodgement is more than three months late, then it may not bode well for the Director concerned. 

So the key take away is if you are Director of a trading company, it is YOUR RESPONSIBILITY to ensure all types of tax and superannuation matters are up to date and paid.

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