The ATO will be contacting relevant clients via letter to inform them about their potential personal liability for company tax debts under the Director Penalty Notice (‘DPN’) program.
The letter will be sent to directors of companies if the company has not met their debt obligations in respect of PAYG withholding, Superannuation Guarantee Charge and GST.
Directors will be notified that the ATO is considering issuing them with a DPN, which makes them personally liable for the debts of their business if the company does not actively manage their debt.
The ATO’s focus is on making directors aware of their obligations and personal liabilities, and the actions the ATO may take if they don’t engage.
The ATO will be providing clear pathways for clients to re-engage with the ATO and avoid escalation.
There is information on the ATO website if your client needs help with paying and support in difficult times.
It is crucial that your client engages with the ATO early before their debts become unmanageable.
The ATO has a payment plan estimator which can be accessed from its website and can be used to work out a payment plan your client can afford.
Generally, while the taxpayer has a debt, general interest charges continue to apply. In addition to this the ATO may issue the taxpayer a late lodgement penalty for outstanding tax lodgments.