As part of the government’s ongoing fight against illegal phoenixing activity, on 5 February 2020 the Senate passed The Treasury Laws Amendment (Combating Illegal Phoenixing) Bill 2019.
Hidden within this legislation was the provision that directors of companies which have a GST debt which is 3 months overdue will become personally liable for such unpaid GST. This is in addition to the personal liability which they already face for non-payment of PAYG Withholding and Superannuation.
This law will come into operation after it receives Royal Assent, and at this stage it is expected to come into force from 1st April 2020.
Directors of companies with outstanding GST obligations are advised to act fast to make the most of an available window of opportunity before the new law becomes operational. Where there is a problem GST debt, directors should consider either paying the debt, or entering into a payment arrangement with the ATO ahead of the commencement of the new law. Where this is not possible, they should obtain professional advice on other potential courses of action.
A new regime is almost upon us, where company directors’ assets will become fair game for the ATO in its bid to recover outstanding GST revenue. If this new law affects you, please contact our office.