Directors to be personally liable for company PAYE and GST debt?

The government has signalled that it will make directors personally liable for company PAYE and GST debt following a recommendation from the Tax Working Group.

The government’s response to the recommendations of the Tax Working Group supports making directors personally liable for PAYE and GST debts of companies. The IoD has strongly advocated against this since it was raised by Inland Revenue in 2016. Our key concern with introducing this new form of personal liability is that it may deter appropriately qualified people from serving on boards. Other concerns include the likelihood of higher compliance and insurance costs, and boards becoming weighed down by conformance rather than focusing on their core strategic role of driving business forward. Withholding funds from Inland Revenue is unlawful and it already has wide powers to take action.

For more, see our submission on the Tax Working Group’s Future of Tax: Interim Report and media release.