Make sure that your company directors keep their details up-to-date with ASIC
A recent case has highlighted how important it is to keep details up-to-date with ASIC (not to mention other government departments, such as the ATO and the Australian Business Registrar).
In the case of Deputy Commissioner of Taxation v Fitzgerald  NSWSC 971, the ATO was seeking approximately $2 million from the director for PAYG withholding amounts the company withheld but didn’t remit to the ATO.
Pursuant to S.269-25(1) of Schedule 1 to the Taxation Administration Act 1953, the Commissioner of Taxation is required to give to a director 21 days’ notice prior to commencing proceedings to recover a penalty (i.e., a director’s penalty notice (DPN)). Importantly, notice under S.269-25 is given at the time the Commissioner posts the notice to the director, and service of a notice can be effected by posting a notice to the address of the director as found in the Australian Securities & Investment Commission’s (“ASIC”) records.
In this case, it appeared that the director’s address as recorded with ASIC was incorrect (although the street name may have been correct). The director claimed he had made attempts to change the address but this had not been done.
Nonetheless, on 20 March 2015 the ATO had sent the DPN to the address of the director which appeared on the records of ASIC as at 19 March 2015. Therefore, despite the fact that the director claimed that he didn’t receive the DPN notice until 7 May 2015, the Supreme Court of New South Wales held that the DPN notice was deemed to have been given to the director on 20 March 2015 (and he was therefore liable for the penalties).
This is a relatively simple thing to check, but one that could have horrible consequences if the taxpayer gets it wrong. Therefore, it would be worthwhile for all clients (especially new clients) to know how important it is to keep these details up-to-date with the relevant authorities.
Should you have any queries in regards to the above article, please do not hesitate to contact our office on
02 4958 1829 or email our Client Support Manager on firstname.lastname@example.org.