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Director Penalty Notices
A Director Penalty Notice (DPN) is a notice from the ATO that can make a company director personally liable for certain unpaid company tax debts, including PAYG withholding, GST and the superannuation guarantee charge. What a director can do in response depends on the type of notice and, importantly, on timing. Because some options close quickly, a director who receives a DPN should get advice without delay.
WHO IS THIS FOR?
Company directors who have received a DPN, and the accountants, bookkeepers and lawyers helping clients with unpaid PAYG, GST or superannuation and the personal liability that can follow.
IN DETAIL
A Director Penalty Notice is a formal notice issued by the ATO, holding company directors personally liable for certain unpaid company tax liabilities. These liabilities include:
Pay As You Go (PAYG) Withholding Tax: Taxes withheld from employees' wages that must be remitted to the ATO.
Superannuation Guarantee Charge (SGC): Contributions should be made to employees' superannuation funds.
Goods and Services Tax (GST): Starting from 2020, GST obligations also fall under the purview of DPNs.
Types of DPNs
There are two main types of DPNs:
Non-Lockdown DPN: Issued when the company has reported its tax liabilities but has not paid them. Directors have 21 days to take action, such as paying the outstanding amounts, appointing a voluntary administrator, or liquidating the company to avoid personal liability.
Lockdown DPN: Issued when the company has not reported its tax liabilities within the required timeframe. In this case, directors are immediately liable, and personal liability cannot be avoided by appointing an administrator or liquidating the company.
The Importance of Timely Response
Receiving a DPN requires prompt and decisive action. Ignoring a DPN can lead to severe consequences, including:
Personal Liability: Directors may be personally responsible for unpaid taxes, which can significantly impact personal finances.
Legal Action: The ATO can initiate legal proceedings against directors who fail to comply with the notice.
Potential Bankruptcy: If not immediately able to settle the DPN liability amount, directors may face bankruptcy.
HOW TTJ CAN HELP
TTJ helps the director and their adviser understand exactly what the notice is, where the company stands, and what is realistically still on the table given the type of DPN and the timing. From there we set out the practical options and the next step, working alongside the existing accountant or lawyer rather than over the top of them.
WHEN TO SEEK HELP
Straight away. Get advice as soon as a DPN arrives, or earlier if the company has unpaid ATO debt, unpaid super, overdue lodgements, or a director who is starting to worry about personal liability. With a DPN, days can matter.
OUR PROCESS
When a DPN comes in, the first job is to understand the notice and the clock attached to it. The steps below show how TTJ works through a DPN matter with the director and their adviser.
Important Considerations
DPN matters are high-stakes and time-sensitive, and the consequences turn on the specific notice and circumstances. Nothing about timing, liability, lockdown or non-lockdown notices, or available ATO options should be treated as settled without review of the actual notice.
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Thyge Trafford-Jones
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Principal — ASIC Registered Liquidator (No. 458321) · AFSA Registered Trustee (No. 1582)
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Member, Australian Restructuring Insolvency & Turnaround Association (ARITA)
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Member, CPA Australia
TTJ Advisory is a registered business name of Restructure My Small Business Pty Ltd (ACN 670 511 476).
Liability limited by a scheme approved under Professional Standards Legislation.
© 2026 TTJ Advisory.
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