Director Penalty Notices: What Australian Company Directors Must Know
As a company director in Australia, ignoring tax obligations can lead to personal liability. Director Penalty Notices make you personally responsible for company debts.
Personal Liability: When Company Debts Become Yours
PAYG Withholding
The tax withheld from employee wages must be remitted to the ATO. Directors face personal liability for all unpaid amounts.
Superannuation Guarantee
Employee super contributions are mandatory. Directors can be personally liable if these payments are missed.
Goods and Services Tax
GST collected must be paid to the ATO on time. Personal liability extends to these unpaid amounts as well.
Company liquidation won't protect you. The ATO can still pursue directors for unpaid tax debts even after a business closes.
Severe Consequences for Non-Compliance
The ATO has significant powers to recover debts from directors personally.
What's at Stake:
  • Garnishee notices against personal bank accounts
  • Bankruptcy proceedings
  • Damaged credit rating
  • Restrictions on future directorships
  • Legal action and court proceedings
How to Respond When You Receive a Notice
Act Immediately
Never ignore a Director Penalty Notice. Time limits are strict and consequences escalate quickly.
Get Professional Help
Consult a tax lawyer or accountant who specialises in Director Penalty Notices. This is not DIY territory.
Assess Options
Payment plans may be available. In some cases, voluntary administration or liquidation might be necessary.
Maintain ATO Communication
Open dialogue with tax authorities improves outcomes. Silence will only make your situation worse.