ATO & Tax Lawyers › Director Penalty Notices
Director Penalty Notice Lawyers — 21 Days. Personal Liability. Act Now.
A director penalty notice (DPN) from the ATO makes you personally liable for your company's unpaid PAYG withholding, superannuation guarantee charge, and GST. You have 21 days from the date of the DPN to respond — after that, personal liability is locked in and cannot be avoided by placing the company into administration. This is one of the most time-critical legal situations a director can face. Get urgent legal advice today.
⚠ A director penalty notice gives you 21 days from the date of the DPN to avoid personal liability by remitting the debt, appointing an administrator, or appointing a liquidator. For lockdown DPNs, personal liability cannot be avoided regardless of what you do. Identify which type you have received and act immediately. Get urgent advice now.
Director Penalty Notice Matters We Handle
From DPN receipt to personal liability defence — urgent legal advice.
DPN Type Assessment — Lockdown vs Non-Lockdown
The most critical first step is identifying whether the DPN is a "lockdown" DPN or a "non-lockdown" DPN. Whether it is lockdown depends on whether the company lodged its BAS, IAS, and SGC statements within 3 months of the due date. A lawyer reviews the DPN and the company's lodgement history immediately to determine which type of DPN has been issued and what options remain available.
21-Day Response Strategy
For a non-lockdown DPN, the director can avoid personal liability within the 21-day window by: (1) causing the company to remit the debt in full; (2) appointing an administrator under Part 5.3A of the Corporations Act 2001; or (3) appointing a liquidator. A lawyer urgently assesses which option is available and viable — and manages the chosen course of action within the 21-day window.
Defending Personal Liability Claims
Even where personal liability attaches, a director may have defences under Division 269 of Schedule 1 to the TAA 1953 — including the "ill health" defence, the "all reasonable steps" defence, and the defence where another person was managing the company's tax affairs at the relevant time without the director's knowledge. A lawyer identifies available defences and manages the defence of personal liability claims.
Multiple DPN Exposure
Where a company has accumulated PAYG, SGC, and GST debts over multiple periods, a director may receive multiple DPNs for different periods — some lockdown, some not. A lawyer maps the full exposure across all periods, identifies which debts can still be avoided, and develops a comprehensive strategy that minimises total personal liability.
SGC Director Penalty Notices
The ATO has issued increasing numbers of DPNs for unpaid superannuation guarantee charge (SGC) — the amount payable where an employer fails to pay the required superannuation contributions for employees. SGC DPNs frequently arise where the company has been paying employees but not remitting their superannuation. A lawyer urgently assesses the SGC DPN and advises on the available response options.
Payment Arrangements & Remission
Where personal liability has attached under a lockdown DPN, a lawyer negotiates a payment arrangement with the ATO on the director's personal account, seeks remission of general interest charge and penalties where appropriate, and identifies whether any other defences or challenges to the DPN are available — including challenging the amount of the underlying debt.
The Legal Framework
Director penalty notices — Division 269 Schedule 1 TAA 1953.
Division 269 Schedule 1 TAA 1953 — the DPN regime
The director penalty notice regime is set out in Division 269 of Schedule 1 to the Tax Administration Act 1953. Under this regime, company directors are personally liable for unpaid PAYG withholding (s16-30), net GST amounts (s1-3 of the GST Act), and superannuation guarantee charge (s65 SGAA 1992) where the company fails to remit these amounts. The DPN must be sent to the director's address as registered with ASIC — which means directors who do not keep their registered address current may not receive the DPN until personal liability has already attached.
Lockdown DPNs — when the 21-day window doesn't help
A DPN becomes a "lockdown" DPN where the company's BAS, IAS, or SGC statement for the relevant period was not lodged within 3 months of the due date. For lockdown DPNs, personal liability cannot be avoided by appointing an administrator or liquidator — the director's personal liability is crystallised regardless of what steps are taken after the DPN is received. Lockdown DPNs represent the most severe form of director personal liability under the tax system — they are effectively automatic personal liability for directors of companies with poor lodgement compliance.
The "all reasonable steps" defence — s269-35
Under s269-35 of Schedule 1 to the TAA 1953, a director has a defence to personal liability under a DPN if, at the time the debt became payable, they took all reasonable steps to ensure that the company either paid the debt or appointed an administrator or liquidator. This defence is narrow — "all reasonable steps" means actual steps taken, not merely the director's subjective belief that they had done enough. A lawyer assesses whether the defence is available on the specific facts and manages the evidence required to establish it.
The "ill health" defence — s269-35(1)(b)
A director who, because of illness or for some other good reason, did not take part in the management of the company during the period when the debt was payable has a defence to personal liability under the DPN regime. This defence requires medical evidence of the illness and evidence that the illness prevented the director from participating in management. It does not apply to a director who was aware of the company's tax obligations but chose not to address them — the illness must be the reason for the failure to take steps.
Newly appointed directors — 30-day grace period
A person who becomes a director of a company after the relevant debt has become payable has 30 days from the date of their appointment to ensure the company pays the debt, appoints an administrator, or is wound up — before personal liability attaches. This 30-day grace period only applies to newly appointed directors and does not apply to existing directors at the time the debt became payable. New directors who discover outstanding DPN liabilities upon appointment must act within 30 days.
ASIC registered address — the DPN delivery trap
The ATO sends DPNs to the director's address as registered with ASIC. If this address is not current — for example, an old home address or a former accountant's address — the DPN may be sent to an address where the director does not receive it. The ATO takes the position that the DPN is validly delivered to the ASIC-registered address — so the 21-day window begins to run even if the director never receives the notice. Directors must ensure their ASIC-registered address is always current to avoid missing a DPN and inadvertently losing the 21-day window to respond.
How It Works
One request. Free urgent DPN advice.
Tell us the date of the DPN, the amount, what it covers (PAYG/SGC/GST), and whether the company has lodged its BAS/IAS on time. A lawyer will contact you within hours.
Submit Your RequestDescribe the DPN
Tell us the date of the DPN, the amount, what debts it covers (PAYG withholding, SGC, GST), the company's BAS and SGC lodgement history, and any other directors of the company.
Matched to a DPN lawyer
Your request is matched to a tax lawyer experienced in director penalty notices — who can assess whether the DPN is a lockdown DPN, identify available defences, and advise on the most urgent response options.
Free urgent consultation
A tax lawyer contacts you urgently — assessing the DPN type, identifying all available options within the 21-day window, and advising on the immediate steps required to protect your personal position.