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.
A good credit score can lead to better loan terms, lower interest rates and smoother approval processes.
Asset finance can be a powerful tool for startups looking to purchase equipment and technology without using up their cash reserves.
As Australia's highest marginal tax bracket impacts more individuals, a growing number of Australians face rising tax obligations due to "bracket creep," where wage growth outpaces tax rate adjustments. This trend is expected to persist, with tax-efficient strategies the backbone for financial advice to help individuals secure long-term wealth.
Discover 9 essential financial planning tips to help new and expecting parents manage the costs of parenthood with confidence and ease.
The Taxable Payments Annual Report (TPAR) is a mandatory report for Australian businesses in certain industries to disclose contractor payments to the ATO by August 28 each year, ensuring accurate tax reporting.
