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What is a Director Penalty Notice?

A Director Penalty Notice (DPN) is a legal document issued by the Australian Tax Office (ATO) to a director of a company. The purpose of the director penalty notice is to inform you (director/s) are now personally liable for the tax debts of your company.

If you’ve received a director penalty notice, together we will get you back on track. Speak to one of our expert insolvency practitioners today.

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What does it mean to be personally liable?

When your company owes funds to the ATO, it becomes a debt by the company. However, in certain situations the debt can become your (director/s) personal debt. This occurs when amounts of PAYG and Superannuation have accrued overtime, the ATO will issue a Director Penalty Notice (DPN).

If you have received a DPN, the sooner you act, the better the outcome. Get in contact with our experts so we can avoid you from becoming personally liable today.

There are two types of DPNs you may receive:

A 21-Day Director Penalty Notice requires you to act within the 21-day period stated in the notice. This Director Penalty Notice also known as a Traditional Director Penalty Notice, is issued when the company’s tax debt has not been paid, but has been reported to the ATO within a three month period.

If you have received a 21-Day Director Penalty Notice, your options are to:

  • Repay the tax debt
  • Appoint an administrator in full under the Corporations Acts
  • Appoint a restructuring practitioner under the Corporations Act
  • Begin to wind up the company’s affairs

If none of the above is actioned, you can become personally liable for the company’s tax debt. Let’s work together to get on the front foot of your business, speak to our experts today.

A Lockdown Director Penalty Notice is issued by the ATO when the tax debt is not paid and has not been reported within three months of the due date. If you have received a Lockdown Director Penalty Notice, we advise to pay the company debt in full within the period stated on the notice to ensure you can avoid personal liability. Time is crucial once your receive a DPN, it is strongly encouraged to speak to an insolvency practitioner today.

What are my options?

Receiving a DPN can be daunting and incredibly stressful. We’re here to alleviate as much financial stress as possible.
Your possible options may include:

“A pleasure to work with, efficient and proactive in their approach to all tasks. Transparent with information and very honest each step of the process, with no surprises at the end. I would highly recommend Mackay Goodwin to friends, family and colleagues.”

Director Penalty Notice FAQs

If you have received a Director Penalty Notice Warning Letter issued by the ATO, you have two options. You can either enter into a payment arrangement with the ATO, or appoint an administrator or liquidator. The ATO want to see you taking action to repay the debt.

If you appoint a liquidator or administrator, the ATO cannot pursue you personally for the debt. However, there are some debts that the ATO can personally pursue you for, one being super.

Yes, you will be able to become a director of another company even if the current company is liquidation.

Meet the people in your team.

At Mackay Goodwin, we have a nationwide team ready to assist you. Our team of qualified professionals, including ASIC registered liquidators are experts at finding solutions for people facing financial difficulties. Located across all major Australian cities, we’re ready to help you in any situation.

Edwin Narayan

Director & ASIC Registered Liquidator

Sydney

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Abby Xu

Analyst

Sydney

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Edwin Narayan

Director & ASIC Registered Liquidator

Sydney

Read More

Abby Xu

Analyst

Sydney

Read More

Edwin Narayan

Director & ASIC Registered Liquidator

Sydney

Read More

Get in touch

Speak to one of our experts now for a free consultation.
Enter your details below or call 1300 750 599.

x

Get in touch

Speak to one of our experts now for a free consultation.
Enter your details below or call 1300 750 599.