Are directors liable for a company’s ATO or superannuation debts?
Updated: May 20
Ordinarily, a director is not automatically liable for these types of debts. However, the new Director Penalty Notice (DPN) regime changes this.
If a company fails to pay GST, superannuation or PAYG tax when it is due, the director can be liable for these debts.
If a director wants to avoid this liability, they need to ensure that the Business Activity Statements and/or the Superannuation Guarantee Charge Statement are lodged with the ATO on time. However, even if this is done, the ATO can still issue a DPN to pursue the director personally for these debts.
A director can then only avoid personal liability if they ensure the debt is paid or take action to put the company into administration or liquidation within the time period fixed under the DPN (being 21 days from it being issued by the ATO). If the DPN expires, then the director will be personally liable.
A DPN will be sent to the director using the contact information on ASIC’s records, so it’s important that these details are up to date.