What is a Director’s Penalty Notice?
A director’s penalty notice (DPN) is a document issued by the Australian Taxation Office (ATO) when there's an unpaid superannuation guarantee charge. DPNs are used to penalize directors of companies for their failure to pay super for their employees. This article will explain why and when DPNs are issued, as well as what you can do if you receive one.
The Purpose of DPNs
The ATO issues DPNs in order to ensure that companies comply with the Super Guarantee Legislation. The purpose of the notices is to motivate company directors to make sure that their employees' superannuation payments are up-to-date. If a company does not comply, then the ATO may issue a DPN in order to collect unpaid superannuation contributions from directors personally.
When Are They Issued?
The ATO can issue a DPN if they determine that a company has failed or neglected to pay an employee’s superannuation guarantee charge. Generally, this applies if the payment was due but not paid within 28 days after the end of the quarter in which it was due. Additionally, before issuing a DPN, the ATO must first issue an SGC statement and be given at least 14 days to rectify the situation before they can issue a penalty notice.
What Can Happen If You Receive One?
If you receive a DPN, it means that you have been held liable for any unpaid superannuation guarantee charge (SGC) owing by your business and must make arrangements with the ATO for payment within 21 days of receiving notice. Failure to do so could result in further action from the ATO such as legal proceedings or bankruptcy proceedings against you personally. Furthermore, depending on your circumstances, it may also be possible for interest charges on overdue payments and/or administrative penalties for failing to comply with SGC requirements.
What it means?
A director’s penalty notice is an important document issued by the Australian Taxation Office when there is an unpaid superannuation guarantee charge owed by your business. It serves as reminder and motivation for company directors to ensure that all their employees' superannuation payments are up-to-date and paid on time as required by law. Receiving such a notice should not be taken lightly; failure to make arrangements with the ATO within 21 days could lead to further consequences such as legal proceedings or bankruptcy proceedings against you personally. It is therefore important for anyone who receives such a notice take immediate steps towards resolving any outstanding matters with the ATO in order to avoid further repercussions down the line.