Director Penalty Notices – changes from the ATO

The ATO recently made a key change to Non-Lockdown Director Penalty Notices (DPNs).

Directors can no longer avoid a penalty by causing the company to enter into an ATO payment plan. This means that directors will remain personally liable for debts such as unpaid PAYG withholding, net GST or SGC obligations.

The four actions available for directors to take within 21 days of receiving the DPN are now as follows:

1. Comply with the obligation to pay the unpaid amount in full to the ATO;
2. Put the company into administration;
3. Appoint a small business restructuring practitioner (SBRP); or
4. Put the company into liquidation.

Note – even if you are no longer a director, you could still be liable for DPNs that relate to debts due before (and in some cases after) the date of your resignation.

If you receive a DPN you must act fast.  The removal of the option for the company to enter into a payment arrangement will inevitably mean that more directors who receive DPNs will need consider seeking advice and assistance from an insolvency practitioner.

 To ensure you are adequately prepared and informed, reach out to one of our client advisors to discuss your particular circumstances.