Following an extended period of leniency, to allow businesses to cope with the tough conditions of the pandemic, the ATO has increased their focus on delinquent accounts.

Last year, the ATO began chasing payments on outstanding debt and acting on their powers to report businesses to credit reporting agencies.  Now, the ATO are focused on issuing letters to company directors warning of their Personal Liability under a Director’s Penalty Notice (DPN).

The ATO are now chasing company directors whose companies have overdue obligations including:

  • PAYG – Pay As You Go
  • SGC – Superannuation Guarantee Charge
  • GST Goods & Services Tax, and
  • other BAS liabilities.

For more information about Director Penalty Notices click here

Changes to DPN legislation all Directors need to be aware of

In April 2022, changes were made to legislation regarding DPNs which now means that;

  • Entering a payment plan will no longer negate the notice until the arrears subject to the DPN are paid in full.
  • Notices must be remedied within 21 days from the date of the notice, which is issued to the director’s residential address as noted on the ASIC record.

The options to achieve remission of the Penalty are, within 21 days of the date of the notice:

  • Clear the amount in full
  • Appoint a Voluntary Administrator
  • Appoint a Liquidator
  • Appoint a Small Business restructuring Practitioner and propose a restructure

Take proactive action if you have outstanding tax debts

  • Ensure that your address details on the ASIC record are up to date & accurate for the directors & the business.
  • If you have an outstanding debt without an arrangement in place, you should contact your Accountant or the ATO without delay to discuss a repayment arrangement.
  • If you are in a current arrangement, then you should ensure that repayments continue to be maintained.
  • Act swiftly should you receive a DPN or other notice from the ATO – the risk to your business & the personal financial risk of inaction has never been greater.
  • If you have received a DPN or if you have any overdue ATO obligations, talk to us sooner rather than later.

The ATO can report Tax Defaults to Credit Bureaus

As part of the current crack down, the ATO is more likely to disclose businesses with non-compliant tax debt to Credit Reporting Bureaus.

  • This applies to any business with an ABN that has arrears greater than $100k and more than 90 days past due that has not satisfactorily engaged with the ATO.
  • ATO must give the taxpayer 28 days’ notice that they intend disclose the debt, during which time the taxpayer can take action to deal with the debt.

For further details click here credit reporting law now being enforced


Will your business need additional funding?
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ScotPac has a range of additional solutions, or we can review your current funding arrangement to assist you in paying down your ATO commitments.

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