Is The Taxman Coming For You?

By Joe Smith

At Sothertons we normally like to focus on the positives and things that can be done to improve your individual or business position in our articles.  However, we have recently seen changes in the approach of the Taxman that we believe every taxpayer needs to be aware of to minimise the risk of the Taxman coming after you, your business or both!

In the current economic climate there may be some businesses that are struggling to keep up with their tax obligations.  And it would appear that the Taxman is acting faster and penalising taxpayers to the full extent of their powers.

An example of this would be if a business got behind in paying GST and PAYG Withholding from wages.  The Taxman is entitled to issue Directors Penalty Notices (DPN’s) to the directors of a company with the penalty up to the amount of the PAYG Withholding and superannuation outstanding plus interest. 

Then if the amounts due are not paid within 21 days the penalties can be applied as being payable by each director of the company personally.  So if PAYG Withholding of $100,000 was outstanding and a company had 4 directors, a total of $100,000 plus $400,000 in penalties would be due to the ATO!  

We are seeing reports of this happening which is resulting in taxpayers being made bankrupt personally due to a company debt.

On a more positive note, there are ‘Safe Harbour Rules’ that may be legislated in the coming months where if the directors of a company put appropriate measures in place to turnaround their business as well as other measures including seeking professional advice, the exposure personally may be reduced significantly.

If you own a business and would like to know more or are interested in possible turnaround strategies for your business we can help with this in a number of ways.  Or if you need assistance with paying your tax obligations please contact Sothertons Gladstone on 4972 1300 and we can negotiate with the Taxman to possibly pay the amounts due over a period of up to 24 months.