The AAT has affirmed that a taxpayer, a sole director and employee of a company, was liable to an administrative penalty of 75% for the 2006 to 2008 years in relation to PAYG amounts deducted from salary and wages which were not remitted to the ATO.
The taxpayer was a qualified accountant who had practised in accounting and related advisory roles for 20 years. He was also the sole director and the only employee of a company for the relevant periods. Prior to the commencement of the hearing (but not prior to an ATO audit), the taxpayer conceded that the company did not remit to the Commissioner the PAYG amounts associated with the salaries and wages paid to him for the relevant years, therefore the only issue before the Tribunal related to the penalties. The taxpayer broadly argued the failure to remit PAYG amounts was due to family law issues and poor record-keeping, hence the penalty imposed should be revised down to 25% (failure to take reasonable care).
The Tribunal said the taxpayer “knew precisely both on a personal and professional level [taking into account the taxpayer’s qualifications and work history as a qualified accountant] that he was due to remit the PAYG amounts calculated and chose not to”. Therefore, it held the taxpayer’s actions placed him squarely in the category of intentional disregard resulting in a 75% shortfall penalty. Further, the Tribunal also affirmed a 20% uplift in the penalties for the 2007 and 2008 years.
(AAT Case [2012] AATA 602, re Pala and FCT, AAT, Ref No 2011/4220-4222, Ettinger SM, 7 September 2012.)
[LTN 175, 10/9]