Have you recently received a Director Penalty Notice (DPN) from the Australian Taxation Office (ATO), but don’t have the means to repay the tax debts being demanded?
Worried you might lose your family home or other valuable personal assets?
Don’t panic you may still have options to avoid strict personal liability, if you have lodged your Business Activity Statements and Superannuation Guarantee Statements (within 3 months of their due dates). If you have lodged these statements but not paid the underlying debt, the ATO may issue a regular DPN and you will be given 21 days to avoid becoming personally liable for the PAYG and superannuation. This 21 day period starts ticking the day the ATO sends the Director Penalty Notice – so you must act fast.
What are my three options?
Your first option after receiving a regular Director Penalty Notice is to pay the debt owed in full. However, if you do not have the means to pay the debt, there are two formal solutions available to you.
The second option is to appoint a liquidator to your company. This option will avoid the director becoming personally liable. Please note that the appointment must be formally made within the 21-day period.
The third option is to appoint an administrator. The appointment of a voluntary administrator must likewise be formally made within the 21-day period.
What happens if I don’t meet the 21-day deadline?
Failure to take one of the 3 options within the 21 day time period of receiving a regular Director Penalty Notice means the director will become personally liable for the debt set out in the notice.
This could result in the director becoming bankrupt if they are unable to pay the debt, which may result in them losing personal assets and the family home.
Did you know there are several types of DPN notices? – be aware of the Lock Down Notice!
If the director has failed to lodge their Business Activity Statements and Superannuation Guarantee Statement within 3 months of their due dates, then the director automatically becomes personally liable for the unpaid PAYG and superannuation. In these circumstances the ATO will issue a different type of notice. This notice will be a lock down DPN. A lock down DPN can be issued by the ATO at any time, even after the appointment of a liquidator or administrator.
The only way to avoid a lock down DPN is to ensure that all Business Activity Statements and Superannuation Guarantee Statements are lodged within 3 months of their due dates.
The Importance of keeping your address current
DPNs are sent to the director’s residential address as recorded with the Australian Securities and Investments Commissions (ASIC). This is why it is crucial that your personal address is up-to-date with ASIC, otherwise you may miss receiving a DPN and will miss the opportunity to avoid personal liability.
Where does Australian Company Liquidations fit in?
At Australian Company Liquidations, we assist company directors to place their companies into liquidation or administration within the required time frame should they receive a regular DPN. If you receive a lock down notice we can also assist with personal bankruptcy or a Personal Insolvency Agreement.
Remember to act fast as you only have 21 days from the date of the notice, so don’t delay taking action. Protect your personal assets now by calling us on our toll-free hotline at 1800 731 155.