At the moment the only recourse the ATO has if a company fails to pay GST is to take recovery action against the company. This might include issuing a Garnishee Notice or taking action to liquidate the company.
However, in February 2019 the Federal Government introduced legislation to make GST subject to director penalty provisions. The intention of which was to allow the ATO to issue Director Penalty Notices for GST.
This would have caused all sorts of problems for directors as they would stand to be personally liable for GST not paid to the ATO on time.
The legislation introduced to parliament has now lapsed, meaning it can’t be considered. Therefore, any new director penalty provisions for GST will have to be introduced by new legislation.
We are currently unsure what the Government intends to do with this issue and will provide a further update once intentions are known.
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