ATO & Director Penalty Notices

With the recent collapse of some high profile businesses, it is a good time to review the personal obligations that can fall on a company director to pay certain tax debts of the business.

Director Penalty Notices:

When a company fails to pay the superannuation contributions for its employees or the PAYG withheld from its employees’ wages, the ATO can recover those debts from the company directors personally.   They do this by issuing a Director Penalty Notice (DPN).  A DPN outlines the unpaid amounts and if there are any options to have the penalty remitted.


Directors receiving a DPN have only 21 days to pay the debt or to apply for remission by putting the business into the hands of an Administrator or by commencing to wind up the company.


If the PAYG withholding tax or super contributions have not been reported to the ATO within 3 months of the original due date, then there is no option for remission and the Director must either pay the debt or the ATO will initiate legal proceeding to recover the debt.

Directors take note:

When a business is experiencing financial trouble, it is often seen as a better option to ignore lodging BAS returns as the amount of ATO debt will just become larger.   However, by doing this, a Director can put their own personal assets at greater risk if they become no longer eligible for remission by acting to put the business into Administration.


If you feel that this may apply to you or to your business, it is best to seek help before the ATO act.  We can assist you with your lodgements to keep you up to date and help you manage your cashflow.


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More information can be found on the ATO website


Mandatory Data Breach Reporting

Do you keep a database of personal information of your clients?

If so, the new Mandatory Data Breach Reporting rules may apply to you.  These new rules became effective on 22 February 2018.

What does this mean?

Entities who are covered by the Privacy Act 1988 will now need to report details of any breaches to their data security that are likely to result in serious harm to any individuals whose personal information is involved in the breach.


Organisations that are covered by the new rules include businesses and not-for-profit organisations with a turnover of $3 million or more as well as all businesses and organisations with lower turnovers which are operating in key areas such as credit reporting bodies and health service providers.


Businesses which fit the above criteria are advised to review their data security and to have a plan in place to cover the steps to be taken should a data breach be discovered.


It’s easy to think that data breaches will only happen to big organisations whose computer systems are hacked, but they can occur to any organisation at any time.


Some examples of data breaches are when mail containing client personal information is posted to an incorrect address or when a USB containing client information is lost or stolen.  Laptop theft is very common too.   So it is a good idea to review your business security systems, including passwords, to minimise the risk.


More information:

More information, including the Form to advise of a Notifiable Data Breach, can be found on the Australian Government website here or on the Australian Government Business website here

First Home Super Saver Scheme

Help to buy your first home

The First Home Super Saver Scheme (FHSS) was introduced to reduce the pressure on affordable housing.  Access to this scheme applies from 1 July 2018.

From 1 July 2017 concessional and non-concessional contributions you make to your super fund can be applied to be released to help you purchase your first home.  Release requests can only be made after 1 July 2018.

Concessional/before tax contributions include salary sacrifice amounts, contributions by your employer and any other contribution you have claimed a tax deduction for.  Non concessional/after tax contributions are contributions you voluntarily make from your after tax dollars.

To be eligible:

  • applicants must be over 18 years of age
  • you must not have owned any property in Australia previously
  • you must not have used the FHSS already
  • intend to live in the property you wish to purchase as soon as practical after purchase
  • intend to live in the property for at least 6 months in the first year of owning the property

And no, don’t think about using the release funds to purchase a house boat, a motor home, vacant land or any other type of premises not capable of being occupied as a residence.

How much can you release from your super?

Eligible individuals can apply to release 100% of non concessional contributions and up to 85% of concessional contributions but are limited to a maximum of up to $15,000 in one financial year.  The maximum that can be released is $30,000 in total across more than one financial year.

Will there be tax?

Of course there will be tax!  The ATO will work out the tax to withhold from your released funds at your estimated marginal tax rate less a 30% tax offset or at 17% tax.

And yes, the released funds are also included in your taxable income in the year you request the release.  But the amount won’t affect any family tax benefit calculations for that same year.

If your request to release the funds is granted, there is a 12 month time limit to sign a purchase or construction contract.  Although it is possible to request an extension, if not granted, you can be requested to recontribute the release amount back to your super fund or pay further tax on the release amounts.

Please note the above is factual information only.  If you would like advice concerning the FHSS and your personal situation please contact us.  One of our authorised representatives would love to help you out.

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HELP and TSL Debts and Overseas Travel

Do you have a HELP or TSL Debt? Plan to travel to or reside in another country?

The ATO has introduced changes relating to Higher Education Loan Program (HELP) and Trade Support Loan (TSL) obligations which commenced 1 July 2017.

If you are living or travelling overseas for more than 183 days in a 12 month period, you will be required to make repayments towards your HELP and TSL debts.  Repayments will be based on your worldwide income for the 2017 financial year. You will be required to submit an overseas travel notification if you meet certain criteria as well.

In the past your debt repayments were based on your Australian income.  However now if you live and work overseas and earn worldwide income that exceeds the minimum HELP and TSL repayment thresholds, you will be required to make repayments against your loan.

These changes apply to all new and existing HELP and TSL debts.

The ATO are looking into those individuals with debts that have been overseas for more than 183 days in a 12 month period and issuing Overseas Travel Notification Letters.

More information can be found on the ATO website at HELP and TSL Overseas Obligations

What you need to do:

If you have a debt and spend 6 months or more overseas then you are required to lodge an Overseas Travel Notification or a non lodgement advice with the ATO.

You can lodge the form yourself through your My Gov account before 31 October following the end of a financial year.  Alternatively you can give us a call to help you lodge this form.  As a registered tax agent we will also receive a lodgement extension to help you avoid those late lodgement penalties from the ATO.

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$20,000 Instant Asset Write Off Extension

Just a reminder…

The small business asset write off threshold of $20,000 will continue until the 30th of June 2018. This applies to small businesses with a turnover threshold of less than $10 million in the 2017 financial year.

To refresh your memory, the small business instant asset write off applies to small businesses that purchase assets costing less than $20,000.

Under this concession, business owners can deduct 100% of the asset in the financial year they are purchased, rather than having to depreciate the asset over its useful life which could be 10 years for example. .


The asset is to ready to use in the financial year you make your claim. This means the asset needs to be fully installed.

You must be a small business with a turnover under $10 million

Things will change 1 July 2018…..

On the 1st of July 2018 the ATO will be reducing the threshold from $20,000 to $1,000, so now is the time to consider whether you can take advantage of this opportunity.

If you are considering purchasing business assets, give us a call first.  We can help make sure you are getting the best deductions for your business.


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