AUTHOR

Jonathon Colbran
Partner
Restructuring & Insolvency
Melbourne, Canberra

The combination of immense pressure and hope leads to a tense cycle of “if we can just…” statements, which go on repeating until it appears that every possible avenue has been exhausted and the owner finally seeks advice. 

There are many factors that determine how long this cycle lasts, but our experience has shown us that it’s often much longer than it should. By the time advice is sought, it’s not uncommon for business owners to reveal that they have received a Director Penalty Notice (DPN) from the tax office – either recently or even months before. This generally occurs when you:

  • have not engaged with the ATO about outstanding debt
  • don’t have an active payment arrangement
  • have a tax debt over $100K
  • have outstanding superannuation guarantee amount

A DPN can come in the form of a “lockdown DPN” or a “non-lockdown DPN”, with the latter being the most common and providing 21 days from the date of issue to act.

Whether you have received a non-lockdown DPN, or a lockdown DPN advising that you are now personally liable for outstanding business tax debt, it’s important not to ignore it. 

Although we would always hope to be able to help a company before it reaches this point, our approach remains the same…