Quick answer
A director penalty notice from the ATO can make company directors personally liable for certain unpaid company amounts, such as PAYG withholding and super guarantee charge. Notices come with strict timeframes. Fast business finance, often secured by property through a caveat or second mortgage, can pay the debt within the notice period. Get professional advice immediately.
Key points
- DPNs can make directors personally liable for company tax debts
- Strict timeframes apply; act straight away
- Property-secured loans can fund within the notice period
- Get advice from an accountant, lawyer or insolvency professional
Why a director penalty notice is different
Most business debts stay with the company. A director penalty notice changes that. It is the ATO’s way of making directors personally responsible for certain company tax amounts the company has not paid. It arrives with a deadline, and what happens after that deadline depends on the type of notice and whether the company reported its obligations on time.
This is general information, not tax or legal advice. If you have received a notice, speak to your accountant, a lawyer or an insolvency professional today.
The options a notice usually presents
| Option | What it means |
|---|---|
| Pay the debt | Clears the penalty; the most common reason for finance |
| Appoint an administrator | A formal insolvency process for the company |
| Appoint a small business restructuring practitioner | A restructuring process for eligible small companies |
| Place the company into liquidation | Winds up the company |
Which options are available depends on the notice. A lockdown notice, which applies where amounts were not reported within the required time, narrows the choices so that paying the debt is generally the main way to remove the penalty.
How finance fits
If the business is viable and the problem is a tax debt that built up during a difficult period, paying it out within the deadline protects the directors and keeps the company trading. The fastest route is usually a property-secured loan:
- Caveat loans can be arranged quickly for short terms. See caveat loans.
- Second mortgages sit behind an existing home loan, leaving it untouched.
- No valuation is needed before approval, which removes a major delay.
- Funding in as little as 24 hours is possible on straightforward deals once documents are signed.
Interest can be prepaid or capitalised, so the business is not hit with a new monthly repayment straight after clearing the ATO.
What to have ready
The notice itself, your ATO account statement, identification for directors, property details and any mortgage statement. The faster those arrive, the faster funds can be released.
Prevent the next one
Set aside PAYG withholding and GST in a separate account each week, lodge BAS and super on time even if you cannot pay, and talk to the ATO early if you are falling behind. Our guide on director penalty notices explains the regime in more depth.
Act today
Take a minute to enquire and tell us the notice date and amount. No credit check to ask, someone experienced reviews it, and one team handles it. Get urgent help with a DPN.
Frequently asked questions
What amounts can a director penalty notice cover?
Unpaid PAYG withholding, GST and super guarantee charge, depending on the circumstances. The ATO website explains the current regime.
How long do I have after a director penalty notice?
Standard notices give a short period to act. Some notices, known as lockdown notices, apply where amounts were not reported on time, and paying the debt is then the main way to remit the penalty. Get advice on which applies to you.
Can a loan really be arranged that fast?
Property-secured loans can fund in as little as 24 hours on straightforward deals once documents are signed. Starting immediately matters.
Should I get legal advice?
Yes. A director penalty notice has serious personal consequences. Speak to your accountant, a lawyer or an insolvency professional straight away.
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