Tax Debt

Paying the debt in instalments

An instalment arrangement with the ATO appears reasonable if you have received a Director Penalty Notice. However, due to recent law changes, a director is now immediately personally liable for the tax debt of the company as soon as you enter into a repayment arrangement with the ATO.

The repayment arrangement allows the company to repay the debt, but if it fails in its obligation, the director becomes immediately personally liable.

Contact us immediately if you have received or suspect you are about to receive a Director Penalty Notice.

Answers + Solutions - FREE - 24/7 - The Insolvency Experts

1300 767 525 or contact us online now

Assessing the risks

The payment of installments is not without risk. The main risk comes if a company commences a repayment arrangement, only to find that it ultimately fails in its obligations under the arrangement.

If a company is placed into Liquidation the Liquidator will examine all payments made to creditors within the past six months. He is then able to claw back preferential payments from creditors, including the tax department.

Payments made following the issue of a Director Penalty Notice may be considered preferential and potentially taken back.

If the Liquidator takes action to recover such payments, the ATO can and will seek the reimbursement of any moneys given up to the Liquidator from you personally.

This means your personal assets are at risk.

It’s therefore essential that before any payments are made under a Director Penalty Notice, you are highly confident that the company will remain solvent for the foreseeable future.

Discuss your payment options with The Insolvency Experts. Call now on 1300 767 525 or enquire online

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