Director Penalty Notices – its personal

You may have heard of the expression, director penalty notice (“DPN”), if not,  it is import that you seek professional advice concerning such notices. A DPN is a method by which the Australian Taxation Office (“ATO”) can make directors personally liable for unremitted group tax, PAYG and superannuation.

If you fail to lodge and pay for three months the DPN is deemed, which essentially means the ATO does not need to notify you and appointing an external administrator will not change the position,  the only way to discharge the personal liability is to arrange for the company to pay the amount or pay the amount yourself.

Remember as a director you have a duty to ensure the company discharges its liabilities as they fall due,  this includes employee superannuation and all amounts due to the ATO.

Please consider if general advise is appropriate for your needs, contact a professional advisor,  your lawyer or an ARITA member if you need tailored advice for your specific circumstances.

Barry Hamilton is a full member of ARITA.