Director Penalty Notice (DPN)

dpn

ATO Debt Myth

You’ve received a Director Penalty Notice (DPN) and you’re worrying about what does this mean and what should you do next? Hi, my name is Slade, I was in the same position myself back in 2009 during the GFC. Business failure can happen to anyone, when it happened to me I had a Bachelor of Business and have since completed a Master of Financial Planning. These days I use my personal experience and knowledge to help people who are dealing with company and personal debt.

It is not unusual for me to receive calls from people who are frantic about ATO debt, I can understand the panic I felt exactly the same way. This is especially the case if they have received a DPN. Many people have the same fear. They think that they will be put in jail for not paying the ATO debt. Here is what I tell these people “the ATO is like any other creditor, it is not a crime to owe the ATO money”. It is my experience that these fears are unfounded and a person would have to have committed substantial fraud for the ATO to take criminal action. Below I explain some basics about DPNs but if you would prefer to talk to me about your situation or you need more detail feel free to call or email me at 1300 097 926 email hello@understandingbankruptcy.com.auI usually answer emails within 24 hours (except on weekends) and if I am on a call when you ring I will call you back as soon as I am able, just leave your details with reception.

What is Director Penalty Notice (DPN)?

DPNs commonly make a director personally liable for the company’s unpaid Superannuation Guarantee Charge (SGC), Pay As You Go (PAYG) withholdings and unpaid GST. Less commonly luxury car tax and wine equalisation tax can also become the director’s personal debt. DPNs can be issued against current, past and newly appointed directors.

2 Types of DPN

  1. Traditional Penalty Notice – gives the director 21 days from the date the notice was issued to either:
    • pay the outstanding amount
    • place the company into liquidation or
    • administration or
    • appoint a Small Business Reconstruction Practitioner (if the company has debts of less than $1,000,000).
  2. Lockdown Penalty Notice – are commonly issued if there are unpaid:
    • PAYG, or GST, and the company has not lodged its company returns with the ATO within three months of their due dates; or
    • SGC has not been lodged by the due date.

If a Lockdown notice is issued the director becomes immediately personally liable and must either pay the debt or lodge a defence.

Get answers from someone who has walked in your shoes

SladeThere is a lot more to know about DPNs and I will be happy to discuss your particular situation with you in detail. This is a free service, if you have a question that I can’t answer I will find the answer and get back to you.

Don’t worry unnecessarily give me a call or send me an email and have your questions answered by someone who has walked in your shoes, 1300 097 926 or email hello@understandingbankruptcy.com.au. If you would like more information about how company debts impact directors click here.