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Director Penalty Notice FAQ

Clear answers on PAYG, super, lockdown rules, and your 21-day window. Understand your position before making your next move.

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Frequently Asked Questions


This FAQ explains, in plain language, what a Director Penalty Notice means and how it affects you personally. It clarifies common questions about PAYG, GST, lockdown vs non-lockdown notices, and the 21-day response window.

The goal is simple: reduce panic, remove confusion, and help you understand your real options. Clear understanding leads to measured action, not rushed decisions.

Have I left this too late?

Not necessarily. Start by checking the issue date on the notice. If your notice is Non-Lockdown, you generally have 21 days to act. If it is Lockdown, the situation is more serious, but options may still exist. Do not assume the worst. Confirm the notice type and date first, then assess your position properly.

What does the 21-day period mean?

It is your response window. If you are still within the 21 days, options may remain available. If you are close to the deadline, you should act immediately. This timeframe is strict and set by law.

 Am I personally exposed now?

The ATO is asserting that you are personally liable. However, liability is not always permanent. Some notices allow actions that can reduce or remove exposure if handled correctly and on time. The first step is to clearly understand your position.

 Can I resign as director to avoid this?

No. Resigning does not remove liability for debts that arose while you were a director, and it can sometimes make the situation more complicated. Do not resign without proper advice.

 Am I personally liable for PAYG and GST?

If you have received a DPN, the ATO is pursuing you personally for specific unpaid PAYG withholding and GST amounts. The exact position depends on lodgement history and timing, but the notice is serious.

 Can this situation be fixed?

Sometimes it can. If you are still within key deadlines, structured options may be available. If deadlines have passed, the situation becomes more difficult but still needs proper review. Every case is different, so acting quickly matters.

 Am I going to lose my house?

Not immediately. A DPN is serious, but asset seizure does not happen overnight. Early and structured action significantly reduces risk. Focus on responding properly rather than assuming the worst.

 What happens if I ignore it?

Your options reduce quickly. The notice will not disappear, deadlines will pass, and personal exposure can become locked in. Ignoring the situation makes it harder to resolve.

 Are all directors personally liable?

Usually, yes. Each director can be pursued individually, including spouses, family members, and co-directors within the same company. Sharing the role often means sharing the risk.

 Can I transfer company assets to protect them?

No. Company assets remain company property and cannot be moved to avoid tax debts. Attempting to transfer assets may create further legal problems.

 Can I close the company and start again?

Not safely. Closing a company to avoid debts may be considered illegal phoenix activity. The debt remains, and recovery action can still be taken against you personally.

 Will a payment plan solve the problem?

Not always. Payment arrangements can help in some situations, but they do not remove a DPN. If cashflow is already strained, an unsustainable plan can make matters worse. This option should be assessed carefully.

 Should I call the ATO straight away?

Not yet. Speaking with the ATO before understanding your position can lead to commitments that limit your options. It is better to get clear advice first, then decide how to engage.

What should I do right now? 

Start by checking the issue date and confirming whether the notice is Lockdown or Non-Lockdown. If it is Non-Lockdown, confirm whether you are still within the 21-day window. Make sure lodgements were made on time. Do not resign, transfer assets, or ignore correspondence. Then seek proper advice as soon as possible.


 If you have just received a DPN and feel overwhelmed, download this guide.

24-Hour DPN First Response Guide