Company board members, including companies limited by guarantee and incorporated associations, are responsible for ensuring the company meets its PAYG withholding and superannuation guarantee obligations. Failure to do so can result in the board members becoming personally liable for the outstanding amounts, plus interest and penalties.
Previously the ATO was required to issue a director penalty notice outlining the unpaid amounts. This did not normally occur until three months after the due date. Provided the debt had been notified to the ATO in the three month period, directors had the option of placing the company into voluntary administration or insolvency within 21 days from receiving the director penalty notice to avoid the penalty.
New legislation means that there is no longer a three month period allowed after the due date for superannuation guarantee. Once the due date is passed, directors automatically become personally liable. Placing the company into administration will no longer relieve directors of their superannuation guarantee liability. In addition, the ATO Commissioner can pursue criminal penalties for serious contraventions of employer superannuation guarantee obligations.
If you are unsure of your superannuation guarantee obligations, please give us a call to discuss.