Director Penalty Notices

Written By Monica Nava

What is a Director Penalty Notice (DPN)?

A Director Penalty Notice (DPN) is a formal notice issued by the Australian Taxation Office (ATO) to hold company directors personally liable for certain unpaid company tax debts. This includes:

  • PAYG withholding

  • Superannuation Guarantee Charge (SGC)

  • GST (in some cases, since 2020)

If your company has outstanding tax obligations, the ATO may send a DPN to each director, putting personal assets at risk if the debts aren't dealt with.

⚠️ Types of DPNs

There are two types of DPNs:

1. Non-Lockdown DPN

  • Issued when BAS or super statements were lodged on time but payments weren't made.

  • Directors have 21 days from the notice date to:

    • Pay the debt

    • Appoint a liquidator or voluntary administrator

    • Enter into Small Business Restructure (SBR)

2. Lockdown DPN

  • Issued when the company failed to lodge tax returns on time.

  • Directors become automatically personally liable.

  • The only way to resolve it is to pay the debt in full — no restructure or administration options.

Why It Matters

Receiving a DPN is a serious legal matter. Ignoring it can lead to:

  • Personal liability

  • Bankruptcy

  • Legal action against directors

✅ What You Can Do

If you've received a DPN or suspect one is coming, act fast:

  • Contact a restructuring or insolvency advisor immediately

  • Explore options like a Small Business Restructure (SBR)

  • Ensure all lodgements are up to date — even if you can't pay yet

🛡️ Pro Tip: Stay Compliant

Even if you can’t afford to pay, lodging your BAS and super on time helps protect you from lockdown DPNs.

Monica Nava
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