Respond to a Director Penalty Notice (DPN)

Resolve a tax audit, objection or dispute Respond to a Director Penalty Notice (DPN) Stop the ATO from pursuing your personal assets for company tax debts. You have received a Director Penalty Notice making you personally liable for your company’s unpaid PAYG, GST or superannuation. We will immediately assess your notice, identify every available defence, […]

When should directors be personally liable for tax debts?

As a general rule, a company provides its shareholders with ‘limited liability’. This means that the extent of resources a shareholder risks when they invest in an enterprise is limited to the amount of capital they put into the company (or agree to put in). If the company runs out of resources, or gets hit with a nasty surprise, the capital may all be lost, but the shareholders are not obliged to put anything additional in. They have just ‘done their doe’.

The limitation of liability for shareholders has not really changed much over the centuries that limited liability companies have been around. What has changed, is the role and responsibility of directors.

Four ways to challenge Director Penalty Notices

The ATO is using Director Penalty Notices more often. However, the ATO officers are only human and they can make mistakes. There are four main ways in which your DPN may be challenged.