Thousands of directors have been warned by the Tax Office to take action on their company’s tax debts or face full enforcement action.
According to Grant Thornton financial advisory partner John McInerney, the ATO has sent out 50,000 alerts this week alone warning of impending director penalty notices.
The letters warn company directors that if they do not actively manage their tax affairs, they will receive a Director Penalty Notice (DPN) from the ATO, which could result in a director being personally liable for the company’s tax debt.
A director must pay the debt or put the company into liquidation within 21 days of receiving the notice to avoid personal liability.
Appointing a small business restructuring (SBR) practitioner or putting the company into voluntary administration are two other options (VA).
In contrast to its pre-pandemic position, Mr. McInerney said the ATO had been supportive of formal debt restructuring proposals (SBR and VA) where it could demonstrate that the underlying business was viable.
All Rights Reserved @ 2019 PS Cube.