For Companies with Lodgements Up to Date
If you have been served a Director Penalty Notice and are unable within 21 days of the date on the notice to either pay the debt in full, enter into a repayment arrangement or appoint a Voluntary Administrator, you must appoint a Liquidator. Learn more about the processes and benefits involved in Liquidation.
In order to avoid personal liability for a company tax and superannuation debt, a Liquidator must be appointed within the 21-day period allowed by the Director Penalty Notice. Merely meeting with a Liquidator or advising the ATO of an intention to make an appointment is not enough to avoid personal liability.
The appointment of a Liquidator can occur almost immediately and The Insolvency Experts are able to organise a liquidation within 24 hours, if required.
Where Lodgements Have Not Been Kept Up to Date
and are More Than 3 Months Overdue
If a company has not lodged all its tax returns within 3 months of the due date – the directors will become automatically personally liable for a penalty equal to the unpaid PAYG and super debt of the company.
The penalty is unable to be waived or avoided even if a director places a company into Liquidation.
If the ATO does issue a Director Penalty Notice, a director will not be able to avoid personal liability for the unpaid PAYG or superannuation tax debt where lodgements are more than 3 months past the due regardless of whether the company is then placed into liquidation. This means you will lose personal assets to pay a company tax debt.
And just because there are outstanding lodgements, don’t think the ATO cannot act.
The ATO can in the absence of lodged returns, issue an estimate of the outstanding tax debt and then issue a DPN on the basis of that estimate.
Accordingly, if you have outstanding returns more than 3 months past the due, and you believe your business is viable, bring all lodgements up to date (although this does not relieve a director of personal liability for director penalties) and then place the company into Voluntary Administration if appropriate.
Alternatively, if your business is not viable and you cannot bring lodgements up to date, you must consider liquidating the company.
If you have a tax debt, and believe the ATO may be about to issue a DPN, call The Insolvency Experts immediately on 1300 767 525.
YOU MUST ALWAYS LODGE ALL BAS AND SUPERANNUATION RETURNS WITHIN 3 MONTHS OF THE DUE DATE OR YOU WILL NOT ESCAPE PERSONAL LIABILITY FOR COMPANY TAX DEBTS WHERE A DIRECTOR PENALTY NOTICE HAS BEEN ISSUED!