If you’re a company director in Australia, it’s important to understand the serious implications of a Director Penalty Notice (DPN). Issued by the Australian Taxation Office (ATO), a DPN makes you personally liable for certain company tax debts. These include unpaid Pay As You Go (PAYG) withholding, Superannuation Guarantee Charge (SGC), and Goods and Services Tax (GST).
There are two types of DPNs: non-lockdown and lockdown.
A non-lockdown DPN applies when your company has lodged its business activity statements or superannuation returns on time, but hasn’t paid the debt. In this case, the director has 21 days from the date of the notice to take action — either by paying the debt, appointing a voluntary administrator, or beginning liquidation. If you act within this window, you may avoid personal liability.
A lockdown DPN is more severe. It applies when the company has failed to both lodge and pay the required amounts within the set timeframes. In this case, directors become automatically and personally liable for the debt, and the only way to discharge the penalty is to pay it in full.
Receiving a DPN can be alarming, but ignoring it only makes things worse. At BATL, we help directors understand their options, respond appropriately, and protect their personal assets wherever possible. This might involve negotiating with the ATO, restructuring the business, or seeking external finance to cover the debt.
If you’ve received a DPN or are concerned you may be at risk, get in touch with the BATL team. Acting quickly and strategically can make all the difference. We’ll help you navigate the process, reduce stress, and explore the most effective path forward for both you and your business.