If you have recently been appointed a director, you may be personally liable for the Company’s outstanding PAYG withholding and Superannuation Guarantee obligations.

You have 30 days from the date of your appointment before you are personally liable for the Company’s unpaid:

  • PAYG withholding liabilities, and
  • SGC liabilities from 1 April 2012.

How? The ATO can issue you penalty notices for the amounts owed by the Company. These are called director penalties.

What You Shouldn't Do

Don’t resign! It’s too late to avoid your responsibility once you’ve been appointed.

Even if you resign within the 30 days, you are liable for the unpaid PAYG withholding and SGC liabilities of the Company that were due before your appointment. This includes:

  • PAYG withholding amounts for the period that you were a director unless you resigned before the first withholding event .
  • Superannuation Guarantee Contributions for reporting periods that started while you were a director unless you resign before the end of the particular quarter.

For more informatin you can check out https://www.ato.gov.au/Business/Your-workers/In-detail/Director-penalty-regime/

What Should You Do?

To avoid personal liablity, you need to have the Company do one of the following before the 30 days is up:

  • pay the PAYG withholding and/or SGC debt in full
  • appoint an Administrator to the Company 
  • begin winding up the Company

Worried?

Need Help? Call us on (02) 9744 9236 for a free 10 minute telephone consultation!