ATO Director Penalties

Company directors have an obligation to ensure that the company meets its pay as you go (PAYG) withholding payment obligations. If you are a director of a company and the company fails to pay a PAYG withholding amount on or before the due date, you can become personally liable for a penalty equal to the unpaid amount.

When an amount remains outstanding, the ATO can issue a director penalty notice.

Within 21 days of service of a director penalty notice, the director must ensure the company:

    pays the amount outstanding
    comes under voluntary administration, or
    has a liquidator appointed.

If the company complies with the notice within the 21 day compliance period, the director penalty will be remitted. If the company does not take appropriate action within this timeframe, recovery action may then commence against the director for the penalty.

Action against a company director may be withdrawn if they were prevented from managing the company at that time due to illness or other circumstances. If this applies to you, contact us to explain your situation.

See also ==> Changes to Director Penalty Laws
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