Why are Director’s Penalty Notices issued by the Tax Office?

Director’s Penalty Notices can be issued by the Tax Office to ensure that director’s meet their PAYG (Pay As You Go) Tax and Superannuation obligations. If these obligations are not met, the director can become personally liable and a director’s penalty notice is issued by the tax office.

Other reasons to issue a Director’s Penalty Notice is failing to submit three consecutive BAS statements.

How is the notice issued?

If the debt is not paid by the due date, a director’s penalty notice is automatically produced and issued by the Tax Office.

What happens after the notice is issued?

You have 21 days from the date of the notice to pay your outstanding obligations in full.  After 21 days, the tax office can issue a bankruptcy notice to the directors.

Can I make a payment arrangement with the Tax Office?

You can make a payment arrangement with the tax office, however this needs to be arranged before the tax office has issued you with a Director’s Penalty Notice.

What are the penalties for not meeting your obligations?

The penalties, are random and can be 100% or even more of your initial obligations.

Can I negotiate with the tax office after receiving a Director’s Penalty Notice?

Yes, you can negotiate with the Tax Office after receiving a Director’s Penalty Notice, however whether they will accept a reduced payment in full of your outstanding obligations is also random, but can depend on your previous payment history.

What should I do if I receive a Director’s Penalty Notice?

With the exception of not lodging 3 consecutive BAS statements, a director, is not liable to a director’s penalty if, within 30 days, the company pays the amount outstanding, goes into voluntary administration, or goes into liquidation.

If you receive a Director’s Penalty Notice and are worried and unsure of what to do, call us on 1111  for a no obligation, informal discussion.