Insights · Tax ·
Director penalty notices
If your company doesn’t pay PAYG withholding, GST or super guarantee, the ATO can make you, as a director, personally liable through the director penalty regime.
What’s covered
- PAYG withholding.
- Net GST (and some related amounts).
- Super guarantee charge.
How it works
The ATO issues a director penalty notice (DPN). If the company reported the amounts on time (lodged BAS, IAS or SGC statements within three months of the due date), directors can generally have the penalty remitted by paying the debt, appointing an administrator or small business restructuring practitioner, or putting the company into liquidation within 21 days of the notice. If the company didn’t lodge on time, a “lockdown” DPN applies and those options to remit generally fall away.
How to protect yourself
- Lodge on time, even if you can’t pay.
- Talk to the ATO early about a payment plan; see Owe the ATO? What to do.
- New directors: you can become liable for existing debts if they aren’t dealt with within 30 days of appointment.
- Keep super current, especially under Payday Super.
Quick answers
Can directors be personally liable for company GST?
Yes, under the director penalty regime, per the ATO.
Want this looked at for your business?
Book a free 15-minute Financial Health Check with Tereza, our practice manager. We look at income, tax, the business, mortgage, insurance and super in one go. Short on time? Grab a 5-minute quick chat.
Sources
Related
General information only. This doesn’t take your circumstances into account and isn’t tax, financial or legal advice. Talk to your accountant or registered tax agent before acting. PRM is not a registered tax agent; tax agent services are provided by Australian Tax & Super Pty Ltd (TPB 25291395).