How does a Director Penalty Notice work?
The Director Penalty Notice, requires the director(s) to comply with the notice within 14 days of issue lest action to recover the debt will be taken against the director - personally! That is, the company's debt will become a personal debt of the director(s).
In order to avoid the personal liability, a director must comply with one of the four options listed in the notice. Directors can either;
- Pay the debt in full;or
- Enter into an Instalment arrangement to repay the debt;or
- Appoint a Voluntary Administrator;or
- Appoint a Liquidator
There are no extensions to the 14 day period!
If the director(s) fail to select one of the four options above within the 14 days allowed by the notice, the director assumes personal liability for the tax debt of the company as indicated in the notice.
If this is allowed to occur, this means your personal assets are at risk.
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