News of the day – 10th May 2021

Changes to the ATO Director Penalty Notice (DPN) Regime

by Adam Dawson – 10th May 2021

Heads up Directors! The new normal is here. The ATO will soon be ramping up its tax debt recovery efforts. With the distraction of COVID-19, they managed to sneak in some changes to the DPN regime.

Previously company Directors were only personally liable for PAYG and Superannuation, but since the 1st of April 2020, any outstanding GST can become a Director’s personal liability, including the Wine Equalisation Tax (WET) and the Luxury Car Tax (LCT).

So, Directors, whether you are up to date with your BAS or not, if you have any outstanding taxes, you can no longer isolate them to the company. They will follow you even if you resign your directorship.

It appears that it will take a while for the recovery efforts to hit average small businesses because the ATO is initially focusing on the big fish, but as they gradually return to full capacity in 2021, they will eventually make the rounds.

If you have a tax debt, the time is now to get ahead of the ATO and manage things before they issue a DPN. Solutions are available, just don’t do nothing!