Author
Grahame WardDirector & ASIC Registered Liquidator
(02) 9220 7120
Understanding your risk and what to do next
The Australian Taxation Office (ATO) takes unpaid company tax debts seriously. While some debts remain the company’s responsibility, others can put Directors personally on the hook. If you're worried about the ATO chasing your debt—or even taking your personal assets, like your house—it’s crucial to understand your risks and act fast.
Which ATO debts can you be personally liable for?
ATO debt is split into 4 main general areas:
- GST
- Income Tax
- PAYG
- Superannuation.
The first two attract no personal liability whilst the last two may expose Directors for personal liability.
- GST and Income tax are company debts and at no stage are they ever a Director’s personal liability. If you have this type of debt and place a company into Liquidation, you are not directly personally liable for these specific debts.
- PAYG and Superannuation is a little more complicated. It all comes down to whether you lodged your BAS and superannuation lodgement returns on time, and if you have received a Director Penalty Notice. If you have not lodged BAS and superannuation lodgement returns, or have lodged these late, or received a DPN – call us straight away, and we can advise the options available.
Can the ATO take your house?
The ATO has strong debt recovery powers, but it won’t automatically seize your personal assets. That said, if you’re personally liable for unpaid tax debts, the ATO can take legal action against you.
There are a number of solutions to working through this – so that NO – the ATO will not take your house, but you need to get advice NOW.
The best way to sort through insolvency issues is to get on the front foot immediately – as once legal action starts, it is very difficult to slow it down or stop it.
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