Director Penalty Notices

Author: Micah Jenkins

Publish Date: May 26, 2009

In recessionary times, companies may fail to remit withheld PAYG tax on time. This can have personal consequences for the company’s directors. 

If the company fails to fulfil their statutory duty to remit this withheld PAYG tax to the ATO quarterly, then under s222AOE of the Income Tax Assessment Act 1936 the ATO will automatically issue a Director Penalty Notice (“DPN”). The recipient of DPN then has four options:

• To immediately pay the ATO the unremitted withheld tax;
• To form an instalment plan for gradually paying the ATO the unremitted withheld tax;
• To place the company into voluntary administration; or
• To place the company into liquidation.

If you are issued with a DPN, you must remember to act fast. If none of the above four options are completed by the end of the fourteen day notice period (commencing on the date of issue by the ATO), Directors become personally liable for the company’s debt to the ATO and the ATO Commissioner can initiate recovery proceedings.   

If you are issued with a DPN you should contact Micah Jenkins on 02 4907 6340 or email  micah.jenkins@harriswheeler.com.au  as a matter of urgency.

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