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Warning Warning Danger Danger – ATO Issuing Director Penalty Warning Letters

Jul 16, 2013 | Written by Cliff Sanderson

You may remember hearing about the big changes to the ATO’s powers to make company directors personally liable for company tax debts under their Director Penalty Regime around this time last year. Here’s a blog I wrote with a summary to refresh your memory. As I said at the time, these changes are far reaching and in the case of PAYG, retrospective.  Well, we are now seeing a lot of action by the ATO in using the new DPN powers and also in just warning they are about to use the powers!

The ATO seemed to go easy on enforcing these new powers for a while whilst directors got their heads around the new playing field. It now appears that period of leniency has ended. We have seen a sharp increase in Director Penalty Notice (DPN) related appointments and have had a lot of calls about a new letter they are sending out warning directors of possible personal liability.

There appears to be a systematic issuing of the letter to companies suspected of having an unpaid and unreported tax debt. If you have received one, and their assumption is true, my advice from last year stands – either pay the tax debt (the obvious preferred solution) or get your company into liquidation ASAP!  I don’t recommend Option 3 which is to trade on and hope it all works out.

If you would like to discuss the situation, give one of our experts at Dissolve a call. They have indepth knowledge of the legislation and will be only happy to help. Any advice they give is confidential and best of all, free!

Cliff Sanderson

Cliff Sanderson