Question:
Director penalty regime to be extended
Answer:
Recent changes are outlined below:
July 1, 2022
- Loss carry back for eligible companies extended to cover 2023 income year.
- Professional firm profits diverted to the professional's spouse or other associates to be reviewed under new Tax Office guidance.
- Corporate collective investment vehicle legislative regime introduced.
- Temporary full expensing of depreciating assets extended to include 2023 income year.
- Depreciable assets of a company joining a tax consolidation group have tax costs setting rules modified for assets depreciated under temporary full expensing rules.
December 9, 2021
- Reduced Pandemic leave disaster payment of $750 per week made available through to 30 June 2022.
August 5, 2021
- COVID-19 Disaster Payments are non-assessable non-exempt income in 2021 income year and later. Payments phasing out as vaccination rates increase.
July 1, 2021
- New Investment Engagement Service launched for businesses planning significant new investments in Australia.
- Tax Office small business independent review service made permanent for businesses with turnover < $10m, for income tax, GST, exercise, luxury car tax, wine equalisation tax and fuel tax credits. Requested before amended assessment issued.
- Small business income tax offset for individuals increased to provide a reduction of 16% for a tax payable up to $1,000.
- Self-managed superannuation funds can now have six members, increased from four members previously.
July 1, 2021
- Some COVID -19 state and territory business grants received by small and medium enterprises are non-assessable, non-exempt income for 2021 and 2022 income years.
- Certain state, territory and local government financial support for individuals and businesses suffering COVID-19 impacts made exempt where businesses have turnover less than $50 million and only in eligible programs.
March 31, 2021
- JobKeeper payments scheme ended.
October 5, 2020
- Boosting apprenticeship commencements subsidy (up to 50% of apprentice's wages) is assessable income.
June 4, 2020
- Homebuilder grant for new home or substantial renovation construction is not subject to income tax.
April 1, 2020
- COVID-19 cash flow boost payments are not subject to income tax
If a company doesn’t remit PAYG Withholding, those who were directors of the company at the time of the failure can be personally liable for a penalty equal to the unremitted PAYG. The Tax Office must first serve a Director’s Penalty Notice (DPN) on the company.
This notice must set out the details of the unpaid PAYG.Directors receiving such a notice have 21 days to avoid personal liability. The action which must be taken within that time is to:
- Pay the unpaid PAYG;
- Enter into an agreement to pay the amount by instalments and make sure those instalments are actually paid;
- Put the company under administration; or
- Cause the company to go into liquidation.Two Bills (Tax Laws Amendment (2011 Measures No. 8) Bill 2011 and Pay As You Go Withholding Non-Compliance Tax Bill 2011) have been introduced to the House of Representatives to extend the Director Penalty regime by making directors personally liable for their company’s unpaid superannuation guarantee amounts.
Additionally, the Bills will allow the Tax Office to commence proceedings to recover Director Penalties three months after the company’s due date where the debt remains unpaid and unreported after the three months passes, without first issuing a DPN.
In some cases, the Bills will enable the Tax Office to reverse any credits available to directors and associates for PAYG deductions where the company has failed to remit those deductions to the Tax Office. This reversal will be effected by imposing a PAYG withholding non-compliance tax on those directors or associates.
These new rules will become effective when the Bills are passed through Parliament and receive Royal Assent.
These Bills have been referred to the Senate Economics Legislation Committee which has recommended that provisions in the Bill specifically targeting phoenix operators should be amended to ensure that directors acting in good faith are not caught. Therefore, those provisions should be omitted from the Bills to enable the rest to be passed.
