Director Penalty Notices ("DPN") means the ATO has made the Director personally liable for the debts of the Company.
Director’s will receive a different DPN letter for GST, PAYG Withholding and Superannuation, however they will normally be issued at the same time. Within these letters, the DPN amount will either be “Lockdown”, or “Non-lockdown”.
Lockdown DPNs
These are issued where the Company's compliance history is poor with lodgements for BAS and SGC forms were not made on time and remained overdue for an extended period. These periods are as follows:
- Superannuation Guarantee Charge - the unpaid amount of the SGC obligation is reported after the due date. The due date for lodging the SGC form with the ATO is
- PAYG and GST - within three months of the due date for lodgement for BAS and IAS.
In the case of a Lockdown DPN, there is nothing a director can do. They are made personally liable for the debt and the only option is to repay the amount in full.
This amount will not be remitted, regardless if you take steps, such as an SBR or liquidation. You will remain personally liable for this debt and will need to deal with it in some manner.
Even if a lockdown DPN has not been received, the ATO can retrospectively issue these notices at any time.
Non-Lockdown DPNs
This type of DPN, provides the directors with options for dealing with the debts within 21 days of the date of the notices to have the penalties remitted. There are 4 options:
- paying the debt in full
- appointing an administrator under section 436A, 436B or 436C of the Corporations Act 2001
- appointing a small business restructuring practitioner under section 453B of that Act
- the company begins to be wound up (within the meaning of the Corporations Act 2001).
Receiving a DPN
DPNs are issued to the residential address of the directors per the ASIC company record. We encourage you to check that this record is correct and immediately updated if it is inaccurate.
When issued, a Director Penalty Notice Account is created under the director’s personal ATO record. We encourage you to check this twice a week as it provides early warning of an impending DPN being issued. You can see this account by navigating to Tax > Accounts > Summary in the director’s personal ATO portal (my.gov.au).
If these notices are issued to a director, then we will need to move quickly to avoid further personal liability for tax debts. Contact us immediately if you receive a DPN >