ATO Debt Recovery and Director Penalty Notices

The ATO has increased its activity around recovering unpaid business debts. During the pandemic, it paused debt recovery, but has now resumed its pursuit of debts.

Since April 2022, the ATO has sent tens of thousands of letters to directors notifying them about impending action. Director penalty notices (DPNs) have been issued to directors who have not replied to the ATO letters and have not otherwise engaged with the ATO about their debts.

DPN law means that if a company did not pay ATO obligations on time, company directors could become personally liable for the amount owing, in addition to penalties.

DPNs can be issued for unpaid PAYG withholding, superannuation guarantee, GST, WET and LCT.

If you received a letter about ATO debt recovery, talk to us. Hart Partners can look at the available options with you.

Talk to Us About Your Business Liabilities

• Are you clear about what you owe the ATO?
• Are you aware of the extent and financial implications of your personal liability?
• Have you given director guarantees to any suppliers that might increase your individual liability?
• Are your ASIC details correct? If a notice is issued to an incorrect address listed on ASIC, legal recovery will go ahead whether the director receives the notice or not, if contact is not made within 21 days of the letter’s date.

If you are considering taking on a new position for an existing company, check the status of the financial obligations of that company before accepting the position, as new directors may become liable for existing debts. Equally, if you resigned from the position of directorship don’t ignore it as the notice may relate to the time you were a director.

Contact us to learn more about managing business finances so you can continue running the business you love.