Are directors personally liable for their company’s tax and superannuation debts?
Answer: Yes they are!
In April 2020 the ATO added GST, Luxury Car Tax and Wine Equalisation Tax to the list of debts for which a director can be held personally liable. There is also a 200% penalty that can be imposed if employees Superannuation Guarantee Charge (‘SGC’) is not lodged on time. With Jobkeeper now ended, it is imported to review the Company tax debts and understand the potential personal liability.
1 January 2021 saw the New Restructuring and Insolvency Process for Small Business come into effect.
A fact sheet in relation to this new process can be found on the Treasury website.
The ATO has commenced reviewing all of the assistance claimed by businesses throughout the 2020 period to ensure that reporting was accurate, criteria was met and that guidelines were followed.
Some of the flags they will be looking at are:
As we start a hopefully better New Year a lot of SME's will be looking for ways to ensure that they continue to survive. Now is the time to revisit business plans and look at strategies to help thrive in 2021.
A lot of businesses struggled with cashflow in 2020 during the various lockdown periods. Now is the time to be looking at how you can improve your cashflow moving forward.
