What is the ATO policy on Tax Debts?
The following is an excerpt from the ATO Receivables Policy. The full policy can be found here
"The potential to recover from directors:
- Officers attempting to recover debts from companies may take all necessary steps to expand the Commissioner's options to facilitate recovery from directors;
- Directors of companies may be personally liable to pay a penalty equivalent to some amounts which have not been remitted by the company (per sections 222AOC and 222AOD of the ITAA 1936). A notice in terms of section 222AOE or section 222APE of Division 9 of Part VI of the Act (known as a Director Penalty Notice) cannot be served once a corporation is placed in liquidation (see chapter entitled 'Payment agreements'). Accordingly, before taking action to wind up a company that has not remitted these specific amounts, a notice in terms of section 222AOE or section 222APE ITAA 1936 should be issued;
- The Corporations Act also provides for directors to assume personal liability for debts incurred by a company while it was trading insolvently. It may, therefore, be appropriate to wind up a company with a view to having the liquidator pursue the directors for payment of the outstanding debt;
- Cases where a director of a company currently indebted to the Commissioner has a past association with another company that went into liquidation leaving significant amounts owing, should be brought to the attention of the relevant technical area to take appropriate action."
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