Director's personal liability for unpaid company tax
If you are a director or are about to become a director of a company, you should make immediate inquiries to ascertain if there are any unpaid and unreported Pay As You Go (PAYG) withholding or Superannuation Guarantee Charge (SGC) amounts.
Directors of a company that fail to meet a PAYG withholding or SGC liability by the due date will become personally liable for a penalty equal to the unpaid amount. The Commissioner of Taxation may issue you with a director penalty notice (DPN) in respect of a penalty which is equal to your company’s unpaid liabilities. Failure to take appropriate steps within 21 days may result in the Commissioner taking recovery action against you personally to recover that penalty, which is equivalent to your company’s unpaid PAYG withholding or SGC liabilities.
If you receive a DPN you should immediately seek professional advice. For more information please visit www.ato.gov.au/dpn.