Director Liability & ATO Compliance
Director Liability & ATO Compliance
When a company falls behind on tax, the debt does not stay with the company. The ATO can make directors personally liable for unpaid PAYG withholding, GST and superannuation guarantee charge. In the 2024-25 financial year the ATO issued more than 84,000 director penalty notices, a 136% increase on the year before, alongside more than 15,000 garnishee notices. Collectable debt has passed $105 billion and the Tax Ombudsman has announced a review of the DPN regime in 2026.
Most of what directors read about this comes from accountants and insolvency firms. That material is useful but it stops where the law starts. A lawyer who acts for directors wrote these guides against the primary sources and the case law that decides these matters in court.
If you have received a director penalty notice, the clock is already running. The 21 days starts when the ATO posts the notice, not when you read it. Contact Astris Law on (07) 4270 8880.
The Guides
Director Penalty Notices: What the Law Actually Says
The flagship guide. How the regime in Division 269 of Schedule 1 to the Taxation Administration Act 1953 works, the difference between a standard DPN and a lockdown DPN, why service to an old ASIC address still counts, the three statutory defences and the case law that has decided them.
Lockdown DPNs: When Liability Cannot Be Remitted
Why lodging late converts a remittable penalty into a permanent personal debt. The three month rule for PAYG withholding and GST, the harsher position for superannuation and why 'we will catch up the lodgements later' is the most expensive sentence in small business.
Superannuation Guarantee Charge: The Director's Personal Exposure
SGC is the strictest corner of the regime. The due date rule, why the law treats estimates as never reported, the interaction with the criminal super provisions and what payday super changes from 1 July 2026.
ATO Debt Enforcement in 2026: Garnishees, Disclosure of Business Tax Debts and Winding Up
The full enforcement toolkit beyond DPNs. Garnishee notices, disclosure of business tax debts to credit reporting bureaus, statutory demands and winding up applications. Includes the end of GIC deductibility from 1 July 2025 and what it does to the real cost of carrying tax debt.
Responding to a DPN: The First 21 Days
A practical playbook. What each remission option actually requires, when small business restructuring is available, when a defence is worth running and the mistakes that close off options before day 21.
Related Reading on This Site
The ATO regime does not operate alone. Tax compliance is also a statutory precondition to the insolvent trading safe harbour and a standing item in directors' duties.
Insolvent Trading: A Director's Guide to Section 588G
The directors' duty to prevent insolvent trading, the defences, the safe harbour and its tax reporting preconditions.
Australian Director Duties: The Law, The Cases and The Consequences
The duties directors owe under the Corporations Act, the penalties for breach and how to manage the risk.
Can Creditors Sue Directors? A Guide to Creditor Rights Against Directors in Australia
The causes of action creditors can bring directly against directors, from insolvent trading to misleading conduct.
Civil Penalties under the Corporations Act
The civil penalty provisions in the Corporations Act and how ASIC enforces them against directors and officers.
Statutory Demands under the Corporations Act
How statutory demands work, the 21 day deadline and the consequences of failing to respond.
Who These Guides Are For
Directors of trading companies, new directors doing due diligence before accepting an appointment, former directors who have been contacted about old liabilities and the accountants and advisors who act for all of them. The content is general information rather than legal advice, so if any of it describes your situation, get advice before the timeframes run.
Talk to us
A brief initial call to understand your situation. If a notice has arrived, the timeframes are short and the options close in order.
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