The ATO is ramping up the heat on directors.

In March of this year, the ATO sent letters to directors who are potentially in breach of their obligations to ensure that the company they represent has met its PAYG withholding, superannuation guarantee charge, or GST obligations.

The director penalty regime ensures that directors are personally liable for certain debts of the company if the debts are not actively managed.

How will the ATO recover this debt? 

To recover this debt, the ATO will issue a director penalty notice to the individual directors.

The ATO can then take action to recover the unpaid amount, including:

• By issuing garnishee notices

• By offsetting tax credits owed to the director against the penalty, or,

• By initiating legal recovery proceedings against the director

If you have received a warning letter from the ATO or a director penalty notice then please contact us for a confidential discussion.