Tax Debt
How to respond to a Director Penalty Notice
A Director Penalty Notice is issued by the ATO and sent to any/all company directors.
A DPN allows 21 days for the directors to undertake one of four choices to deal with the outstanding tax debt.
The choices are:
- Pay the debt in full
- Pay the debt in instalments
- Appoint a Voluntary Administrator
- Appoint a Liquidator
The 21 days starts from the date on the Director Penalty Notice and there are NO EXTENSIONS.
If a director fails to achieve one of the stated options within 21 days –
the director becomes personal liability for the ATO tax debt.
That means that the ATO can commence action against the director personally, who could lose personal assets like their house, car and shares.
Act early to avoid facing personal liability
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