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I note that I have previously blogged about the action to be taken by the ATO against directors of companies that have failed to remit PAYG and Superannuation payments (via Director Penalty Notices). It was interesting to hear recently that in order to increase compliance with the new tax regime regarding outstanding taxes, those directors from the 11/12 tax year who have claimed a credit for PAYG tax in their personal tax return when the company of which they are a director of has not paid are also under the spotlight.

Directors claiming a refund appear to fall foul of PAYG withholding Non-Compliance Tax (NCT) notices (under section 18-140). It is understood that the ATO aims to identify those directors that may become subject to NCT and if the director has not lodged their income tax return for the relevant year, a flag against them will be raised in the system and a review undertaken when the return is lodged. If however, the return for the relevant year by the director had already issued, the NCT notice would be issued at the time the director was identified.

It is interesting to see that the ATO is adopting a “whole of matter” approach to non-compliant companies by linking in the personal affairs of the directors to ensure it pulls all available levers to gain as high a level of compliance with the taxation regime as possible.

Do you know where the ATO is looking next?

What are your thoughts about director compliance?

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