ATO Debt Management
During the pandemic, the Australian Taxation Office (ATO) put a hold on debt collection. They have now resumed their debt collection activities as we begin to move forward.
Tens of thousands of director penalty notice warnings have been issued as well as notices of intent to disclose debt to credit reporting bureaus.
Director Penalty Notice (DPN) - Warnings
A director is personally liable for making sure a company meets its PAYG Withholding, GST and SGC obligations. Failure to lodge and pay these liabilities by the due date could result in a Director Penalty Notice (DPN).
The ATO has and will be continuing to issue DPN warnings to directors to notify them of their obligations and to warn them that they will be personally liable for the debt if they do not actively manage it.
If a director receives a DPN warning letter, they must pay the ATO debt within 21 days or speak to their accountant and the ATO immediately about managing this debt to ensure they do not receive a director penalty notice.
To avoid receiving a warning letter or DPN notice, directors must ensure they are actively managing their ATO debt and are paying liabilities as they fall due.
Notice of Intent to Disclose
Clients have been issued notices warning of the intent to report ATO debt to credit reporting bureaus.
If you have received this letter, you must pay the debt within 28 days or contact the ATO to manage the debt.
If you do not take steps to actively manage this debt, you remain eligible for disclosure.
Things you can do to manage your ATO liabilities:
1. Manage current debt - Put a debt management plan in place to pay off any outstanding liabilities. To do this, speak to your accountant about all current outstanding liabilities and put in place a plan to have this paid off.
2. Cash Flow Management - Plan for future tax liabilities by keeping in mind future due dates and factoring these into your cash flow forecast. Upcoming due dates can be found in Kamper’s monthly newsletters.
It is extremely important to ensure tax debts are paid on time to avoid incurring any general interest charges or penalties.