Director Penalty Notice

The Australian Taxation Office (ATO) has the power to collect outstanding deducted taxes by making directors liable for a ‘penalty’ of the same amount as the unpaid tax. These provisions create a liability to the ATO in the name of the director.

Each director of a company becomes individually and separately liable for the full amount of the penalty. If a Director receives a Director Penalty Notice, it requires the Director to take one of four specific actions within 21 days of issue, or the Director will be personally liable for the debt:

  • Pay the debt in full
  • Enter into an instalment arrangement to repay the debt
  • Appoint a Voluntary Administrator, or
  • Appoint a Liquidator

For more information about Director Penalty Notices contact SM Solvency Accountants on 1300 434 165 today