There are two types of Director Penalty Notices which the ATO can issue where a company fails to pay superannuation and PAYG Tax:
- “Lockdown” Director Penalty Notices which are issued to a company that has not lodged its Superannuation Guarantee Charge Statements (SGC Statement) and/orActivity Statements with the ATO within the timeframes set out below; and
- “Ordinary” Director Penalty Notices which are issued where a company has lodged its SGC Statements or Activity Statements with the ATO within three months of being due.
To avoid receiving a “lockdown” Director Penalty Notice directors should make sure that Activity Statements are lodged within three months of being due and if superannuation is not paid that SGC Statements are also lodged within the timeframes set out below. In May 2019 new legislation was passed to change the date upon which company directors become automatically liable for SGC amounts. The new date is the date which SGC Statements are due which are:
|Quarter||Period||Super Due for Payment||SGC Statement Due Date|
|1||1 July – 30 September||28-Oct||28-Nov|
|2||1 October – 31 December||28-Feb||28-Feb|
|3||1 January – 31 March||28-April||28-May|
|4||1 April – 30 June||28-Jul||28-Aug|
If you DON’T lodge within the periods set out above the ATO will at some stage issue a “lockdown” Director Penalty Notice and you will be liable for the amount claimed in the notice unless the amount claimed is paid.
If you have lodged Activity Statements and SGC Statements within three months of being due and you get a Director Penalty Notice you can avoid liability by appointing a voluntary administrator or liquidator within 21 days of the date of the notice.
If you are in this situation you should consider the following.
Get Advice on Options from a Qualified Professional
Liquidation is only one of the options available. We can advise you on and assist with implementing other options which might be available, such as:
- Voluntary administration.
- Negotiating a payment arrangement.
- Business turnaround and restructure.
- Obtaining finance.
Consider the Risks Involved with Liquidation
Before deciding what to do you should consider the risks that will be associated with a liquidation of your company (as well as risks associated with other options). Risks might include:
- Personal guarantee claims by creditors;
- An insolvent trading claim being pursued by a Liquidator;
- Other claims being pursued by a Liquidator;
- Reputational issues;
- Whether liquidation or voluntary administration affects any licences which you hold.
Appoint a Liquidator if Appropriate
If liquidation is the best option, a liquidator can be appointed quickly. If all shareholders agree to appoint a liquidator then the liquidator can be appointed by the shareholders simply signing a resolution which we will prepare.
If a company has sufficient assets or funds to pay some of the costs of liquidation then the directors will not have to contribute any funds towards the costs of a liquidation. However, if a company has no assets, we will generally want the directors to contribute between $5,500 and $10,000 to meet some of the costs of liquidation, depending on the size of the company and the number of creditors it has.
Received a Director Penalty Notice?Contact us for Assistance
If you have received a Director Penalty Notice you should urgently seek advice.
We may be able to assist you so please get in contact with us for a free, no obligation discussion.