Unique Director Identification Numbers to Wipe Out Illegal Phoenix Activity

The Government will soon introduce a unique Director Identification Number (“DIN”) to combat illegal phoenix activity and to curb the activities of pre-insolvency advisors who will also be targeted and potentially held liable for their advice.

As part of the reforms, the Government is consulting on widening the scope of Directors personal liability to include GST liabilities as part of the Director Penalty provisions.

It is likely that personal liability for unpaid GST will operate in a similar way to current Director Penalty Notices that currently apply to unpaid PAYG and Superannuation i.e.

• If a Director does not report by lodging a BAS return within 3 months of the due date for lodgement, an automatic personal liability will apply for a Company’s unpaid GST debt as well as its unpaid PAYG and Super debts.

• Where a Director does report within this 3 month period, they will be able to avoid personal liability for the various company tax debts provided the Company is placed into liquidation within 21 days of the date on the Director Penalty Notice.

The Government’s consulting on Personal liability for directors with unreported and unpaid Company GST debts is a significant development that all Directors must be made aware of.