The powers available to the ATO have been expanded and the risk and impact to business owners has never been greater. Here’s a summary of the Director Penalty Notice regime (DPN).
DPN stands for “Director Penalty Notice”. A DPN is issued by the Australian Taxation Office (ATO) to the directors of a company if the company fails to meet its lodgement obligations for GST, pay as you go (PAYG) withholding tax or employee superannuation guarantee obligations.
When a DPN is issued, the directors of the company become personally liable for the unpaid taxes. This means that the ATO can take legal action against the directors to recover the unpaid taxes, and the directors may be held personally liable for the unpaid amount, including any penalties and interest.
It is important to take immediate action if you receive a DPN. The first step is to seek guidance from your accountant to discuss the issue and to navigate a way to respond and manage the outcome.
It is important to note that, the ATO may take legal action against the directors to recover the unpaid taxes, and the directors may be held personally liable for the unpaid amount, including any penalties and interest. It can also affect your credit score, making it difficult to obtain loans or credit in the future.
If you believe that the DPN is issued in error, you can object to the notice by writing to the ATO within 21 days of the date of the notice. The ATO will then review the matter and decide whether to confirm, vary or withdraw the notice.
In summary, if you receive a DPN, take it seriously and take immediate action to address the issue. Contact the ATO and seek professional advice. If the notice is issued in error, consider objecting to it within the 21-day timeframe.
The clock is ticking from the date of issue of the DPN and the time to react is limited. So if you or someone you know receives a DPN, react immediately by seeking advice from your accountant. The ATO are becoming more active and aggressive in debt recovery. Please contact us to find out how working with us will have a positive impact upon your business.