ATO payment arrangements are no longer a protection
If you have an outstanding tax debt or have not met Superannuation Guarantee Charge (SGC) obligations and are at risk of receiving a ‘Non-Lockdown’ Director Penalty Notice (DPN), we urge you to take action immediately. The ATO is awakening from its Covid slumber.
The ATO recently ‘snuck in’ a change to Non-Lockdown DPNs. And it’s an alarming one. Directors can no longer avoid a penalty by causing the company to enter into a payment plan. It means directors will remain personally liable for the debts (unpaid PAYG withholding, net GST or SGC obligations).
Directors now have 21 days from the date of the DPN to exercise one of 4 options:
1. Pay the liability in full
2. Put the company into administration
3. Appoint a Small Business Restructuring Practitioner (SBRP)
4. Put the company into liquidation
It’s important to note that even if you’re no longer a director, you could still be liable for director penalties equal to the unpaid liabilities of the company*.
Increase in insolvencies
Removing the option of payment plans will likely lead to an increase in directors who receive DPNs putting their company into administration or liquidation or appointing a SBRP.
The best action is to act now. Before it’s too late.
And if you have received a DPN, it’s equally important to contact our team immediately. We have 15 Small Business Restructuring Practitioners around the country and can provide guidance to determine the best solution.
*If you are no longer a director, you remain liable for director penalties equal to the unpaid PAYG withholding, net GST and SGC liabilities of the company that:
- Were due before the date of your resignation
- Fell due after your resignation when:
- For PAYG withholding and net GST (inclusive of LCT and WET), the first withholding event in the reporting period occurred before your resignation
- For SGC liabilities, the date the charge became payable.
We can work with you to address this situation, contact us here to make an enquiry.