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.