The Covid-19 pandemic has put record levels of stress on Australian business. Rolling lockdowns, supply chain issues, lack of staff availability and the increased costs of raw materials are some of the many factors that have crippled Australian businesses and made these the most challenging conditions in recent memory/

Throughout the pandemic, the ATO has been hugely supportive, with very little recovery action taking place and significant latitude being granted to taxpayers who have fallen behind on their obligations to the ATO.

However, the first indications have emerged of that stance shifting with the announcement by the ATO that they have begun writing to Company Directors, informing them about their potential personal liability for Company tax debts under the Director Penalty Notice (DPN) program.

The DPN program allows for a Director to become personally liable for any of the following types of Company tax debt:

• PAYG withholding;
• Net GST (which includes Luxury Car Tax and Wine Equalisation Tax); and
• Superannuation Guarantee Charge.

If a Director receives a DPN, they will have 21 days to remedy the obligation, by:

• Paying the debt; or
• Appointing a Voluntary Administrator; or
• Appointing a Small Business Restructuring Practitioner; or
• Appointing a Liquidator.

Here at Rodgers Reidy, we are experts in providing advice to all types of businesses that are in financial distress and for Directors who have received an ATO warning letter or a DPN. We are also at the forefront of the new Small Business Restructure (SBR) regime, which is a suitable remedy to a DPN and is a far more efficient and cost-effective alternative to appointing a Voluntary Administrator or Liquidator. Further information regarding the SBR regime can be found in the attached brochure.

For further information regarding DPNs or the options available to Directors, please contact me one of our experienced Directors.