Deputy Commissioner of Taxation v Webb

The Deputy Commissioner of Taxation (DTC) sought to recover unpaid income tax from Mr. Webb, who had been a director of a company that failed to remit its PAYG withholding obligations. The dispute concerned whether Mr. Webb was personally liable for the company's unpaid tax under section 269-25 of Schedule 1 to the *Taxation Administration Act 1953* (Cth) (TAA). The matter was heard in the Federal Court of Australia.

The primary legal issue before the Court was whether Mr. Webb had taken all reasonable steps to ensure the company complied with its obligations to remit the withheld amounts to the Commissioner. This required the Court to consider the scope of the director's duty under section 269-25(1) of the TAA and the nature of the evidence required to establish that all reasonable steps had been taken.

Judge Wilson found that Mr. Webb had failed to discharge his onus of proving that he had taken all reasonable steps. The Court noted that while Mr. Webb had made some efforts to address the company's financial difficulties, these efforts did not extend to ensuring the company met its PAYG withholding obligations. The Court emphasised that a director's responsibility extends beyond merely identifying financial distress; it includes taking concrete steps to ensure compliance with statutory tax remittance obligations. The Court further held that the director's personal financial position or the company's overall financial viability were not determinative of whether reasonable steps had been taken to remit the withheld amounts.

The Court ordered that Mr. Webb was personally liable for the outstanding PAYG withholding amounts, plus interest and costs.