New Company Director Penalty Regime: must read for all directors and aspiring directors!!

Directors are now in the firing line. Changes have been recently made to the tax law to reduce the scope for companies to engage in fraudulent phoenix activity or to escape liabilities and payment of employee entitlements.

*'Phoenix activity' refers to a new company which has emerged from the collapse of another, but is set up to appear to customers as though it's "business as usual", trading in similar activities as the collapsed company. 

Directors are now personally liable for their company's PAYG obligations if they are not paid by the due date and any outstanding superannuation guarantee debts. For new directors, liability occurs 30 days after the directors appointment.

So what could this mean for you?

If you are an aspiring director - this is definitely more of a reason to do your due diligence and make sure the company is paying its PAYG and superannuation guarantee on time.

I often come across small businesses where the husband and wife are both co-directors. I rarely advise this type of business set-up. I am a strong advocate of having a risk and non-risk person in a family business.

If your business is constantly struggling to meet your PAYG and superannuation obligations than I recommend going back to basics - implementing a budget and business plan, putting in place an effective marketing strategy, carefully monitoring expenses and an efficient administration to be invoicing and collecting debtor payments swiftly. I am able to assist in all these areas at affordable prices.

If you feel you may need to review your exposure to any risks associated with being a director, feel free to contact me via email or on Twitter.

7 Tips on making the most of your Tax Refund!

Its not everyday that we get money from the Tax Office. Before you hit the shops, have a read through the tips below to see if you are getting the most out of your tax refund.

1. Pay off credit cards - Yes, this seems a bit boring, but if you have got credit card debt, its likely too be incurring excessive amounts of interest which would be costing you lots of money. It's also a great feeling to be able to get the debt down a considerable amount in one hit.

2. On the subject of debt - use the money to pay off your home loan. You'd be surprised at how much any additional payments off your home loan can save you interest and shorten the loan term in the long run!

3. Don't have a home? Well then consider putting it towards that house deposit if you're saving up for one.

4. Establish a "sleep well at night" savings account. If you have no credit card debt and your mortgage is under control, consider having a sleep well at night savings account. This type of account is great to have as a back-up in case of an unexpected large bill or a drop in income to help you get by in the short term.

5. Balance - without wanting my tips to sound "un-exciting", if you do feel the need to reward yourself with a little retail, consider balance. Can you allocate 50% of the refund to any of the above areas? Anything is better than nothing....

6. If you do want to allocate it to your mortgage or savings account, consider having the refund paid directly into that bank account, rather than your everyday account. It will be much less tempting to spend if you can't immediately access it for the shopping spree.

7. Not getting a tax refund? There could be a variety of reasons why you're not getting any money back from the ATO. I definitely encourage anyone who is concerned about this, to make sure you are going to a good (and affordable) accountant to help you navigate this area and claim all expenses you are entitled too.