Companies in Australia are required to withhold money from wages to meet their employees’ tax liabilities payable to the Australia Taxation Office (ATO), and are also required to pay either a Super Guarantee (SG) or Superannuation Guarantee Charge (SGC). I will refer to these liabilities hereafter as obligations.
A Director Penalty Notice (DPN) is a notice that the Australian Tax Office (ATO) sends a Director to hold them personally liable for the company’s unpaid tax liabilities for PAYG and SGC.
To avoid being personal liable for the unpaid PAYG and SGC when receiving a DPN, the Company is required to lodge their Business Activity Statement and Superannuation Contribution Statement no later than three (3) months after the due date.
A newly appointed Director should check for any unreported or unpaid PAYG or Super obligations. If there are outstanding obligations then the new Director may become liable.
If you cease being a Director of a company, you will still be liable if there were outstanding obligations prior to your resignation and you will become liable for any obligations that fall due after you retire as a Director.
There are defences that a Director may utilise in certain circumstances to be sent to the ATO to seek their acknowledgement that no personal penalty should be enforced. For further information on the above please call today on 02 8234 8865 or fill out our contact us form to find out how we can help.