What happens if super doesn’t reach employees funds on time?
Bad things happen.
The expense is no longer tax deductible, super is calculated on all payments to employees (like overtime and allowances), fines are payable to the ATO, interest is payable to the fund for the employee, and directors will be personally chased for the payment. Its bad to be just a little late.
ATO says:
Once you become a director, you are responsible for ensuring the company meets its PAYGW, net GST and SGC obligations in full by the due date.
If the company has more than one director, the amounts owed are likely to be the same for all directors.
This is because the company liability (what the company owes) and the director penalty liability are parallel in nature.
A Director penalty notice (DPN) is a notice we (ATO) must give you that allows us to recover the company’s unpaid amounts.
The notice outlines the unpaid amounts and remission options available to you.
The tax office can recover the amounts of the director penalty by:
– issuing garnishee notices
– offsetting any of your tax credits against the director penalties
– initiating legal recovery proceedings against you to recover the director penalty.
Once DPNs have issued, we may commence or recommence recovery action from each director personally, because these penalties are a parallel liability.
To recover the debt, the Commissioner can pursue either:
– the company
– the directors
This means that any payment or credit applied to the company’s account or to a director’s account to reduce the penalty, will reduce the director penalty amount for the other directors and the company’s corresponding liability for the same reporting period.
Its a long way of saying ‘pay on time or face the consequences’.
Need help to keep on top of all the deadlines? Ask us to give you a hand.
