GST owed payment liabilities

From 1 April 2020, company directors can in certain circumstances be held personally liable for outstanding GST owed to the ATO. The DPN regime already applies to unpaid PAYG withholding and superannuation guarantee

21 Day GST Director Penalty Notices may be issued by the ATO to a director if their company fails to pay GST but lodges the relevant activity statements within three months of the due dates. To avoid personally liability, within the 21-day period of the notice being issued, directors can:

• Pay the GST from the company

• Place the company into liquidation or voluntary administration.

Alternatively, the ATO can issue Lockdown GST Director Penalty Notices if a company fails to pay GST and also fails to lodge activity statements within three months of being due. In this case, personal liability cannot be avoided through bankruptcy, liquidation or voluntary administration.

The take-home message is that corporate clients need to keep their GST lodgement and payment obligations up-to-date moving forward.