In March, the ATO has begun contacting directors to inform them that they could potentially be held liable for company tax debts under the Director Penalty Notice (DPN) program. Directors will receive this letter if the company has not met debt obligations, specifically regarding Superannuation Guarantee Charge, PAYG Withholding and GST.
What to expect?
If the ATO identifies your company for not meeting its debt obligations, you will receive a notice outlining their intention to issue you with a DPN. Once a DPN is received you may be held personally liable for the debts of your company. The ATO intends on making directors aware of their personal liabilities if they do not engage with them. Once the ATO reaches out to you they will provide options to you and assistance to prevent any escalations.
Note: if you decide to use a payment plan, the general interest charges will continue to any debt. To prevent this charge, you are encouraged to bring your account up to date.
What can you do?
Within 21 days of receiving a DPN a director must do one of these four options:
1. Completely pay the liability
2. Put the company into administration
3. Appoint a Small Business Restructuring Practitioner (SBRP)
4. Put the company into liquidation
For more information you can go to the ATO website here.
For more information or assistance please contact Infinite Accounting Solutions on 02 9899 4730 or via the contact page at www.ias-ca.com.au