Gifts are great but here’s one that no one ever wants to receive: a Director’s Penalty Notice.
If you received one – well, you are on a race against the clock to do something about it. And here’s where I jump in to help. In this 2 Minute Accountant video I tell you all about what you need to do about the Director’s Penalty Notice.
Just before we start, I need you to know that, if you don’t take this seriously, you can be held personally liable for the losses in your company.
What is a Director’s Penalty Notice (DPN)?
A DPN is a notice from the ATO. If you received one, there are three things you can do to protect yourself:
- Pay your debts to the ATO
- Come up with an agreement
- Put the company into liquidation
If you pay the ATO or put the company into liquidation, generally you are absolved of any further future responsibility to the ATO.
Well, that’s how it used to be…
…until July 2012.
In July 2012, the ATO created a new system. Now, if you didn’t lodge your activity statements within three months, they can make you personally liable for the super and for the taxes for the staff.
So even though you put the company into liquidation, you, as the director, become personally liable.
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What can you do about it?
Three things:
- The first thing you need to do before you even get to this stage, is make sure you lodge your BAS and activity statements on time, all within three months. If you do that, then even if the company goes bust, you will be protected. If you don’t… well, you become personally liable.
- The second thing to do is contact your lawyer, accountant or business advisor.
- The third thing is to check your delivery address.
The ATO will send the notice to the last address you registered with them. If you moved house or offices without updating your address for the ATO, they will send the notice to the old address.
This is no excuse.
You have a limited amount of time (21-28 days) to deal with this. If you don’t deal with this, you will be personally liable for all debts.
You might also be interested in: What Is A Shareholders’ Agreement And Why Do You Need It?
Received a DPN?
If you received a DPN, you need to take immediate action. I can help you figure out which steps you need to take to avoid becoming personally liable for the debts of your company. Contact me now:
