The director penalty regime ensures that directors are personally liable for certain debts of the company if
the debts are not actively managed. The liability applies to both current and former directors.
To recover this debt, the ATO will issue a director penalty notice to the individual directors. The ATO can then take action to recover the
unpaid amount, including:
These letters are a warning shot and should not be ignored.
IN SOME CASES
In some cases it is possible for the penalty to be remitted but this depends on when the PAYG, GST or SGC amounts are reported to the ATO. For example, in some cases the penalty can be remitted if an administrator or small business restructuring practitioner is appointed to the company, or the company begins to be wound up. However, this is normally only possible for PAYG and GST amounts if they are reported to the ATO within 3 months of the due date. For SGC amounts this is only possible if the unpaid amount is reported by the due date of the SGC statement.
If the unpaid amounts are not reported to the ATO by the relevant deadline then the only way for the penalty to be remitted is for the debt to be paid in full. Winding up the company at this stage will not make the liability of the directors go away.
If you have received a warning letter from the ATO or a director penalty notice then please contact us immediately.
Lunch & Learn Workshop // 4 September, 2026 - 12:00 - 1:30pm
$35pp includes lunch
Many business owners believe growth comes from more sales. But in reality, the strongest and most profitable
businesses grow by improving how the business works, not just by selling more. This session is designed to change that. The
5-Critical Financial Metrics
is a practical workshop that shows you where small, targeted changes can create disproportionately big improvements in profit, cashflow and
sustainability.
Lunch & Learn Workshop // 26 June, 2026 - 12:00 - 1:30pm
$35pp includes lunch
This session is designed to change that. Pricing, Profit &
Your Ideal Client
is a practical workshop that helps you understand where your
profit really comes from,
how pricing decisions affect margins, and why working with clients that align with your business makes a measurable difference to both
profit and cashflow.
AI-Enhanced Automation for Accounting and Finance Professionals: Leveraging RPA, VBA, ChatGPT, and Copilot for Innovation and
Productivity.
Join SkyBots’ 2-day Workshop in MELBOURNE with automation expert Daryl Aw to revolutionise your workflow using Power
Automate, UiPath, VBA,
and cutting-edge
Agentic AI. Tailored for accounting and finance professionals, bookkeepers and small business owners,
this hands-on training will teach you to automate repetitive tasks, generate and optimise VBA scripts, and deploy robust automation
solutions independently.
On 31 March, the Fringe Benefits Tax (FBT) year ends. With the ever increasing budget deficits, the ATO will be reviewing whether all employers who should be paying FBT are, and that they are paying the right amount. Who needs to lodge a FBT return? Find out here.
If you’re a director of a small business, Payday Super isn’t just an HR or payroll issue. It’s a governance issue that could directly affect your personal legal exposure.
