A practical guide for directors who have received a Director Penalty Notice. You have options. We can help.
Free, no-obligation, 30-minute diagnostic call. No invoice. No follow-up unless you want it.
If you are reading this, you are probably frightened. You may not have slept properly in days. You may be wondering whether you are about to lose everything you have worked for.
This is serious. But it is not the end. There are options. And you are not alone.
The team at Rebound Advisory has worked in restructuring and turnaround advisory on both sides of the table. We have dealt with hundreds of Director Penalty Notice situations. We know exactly where you are right now, and we know the way through.
The directors who come through this best are not the ones with the most money or the best lawyers. They are the ones who acted quickly, understood their position clearly, and got the right people around them before the deadline passed.
A Director Penalty Notice makes you personally liable for your company's unpaid PAYG withholding, super, or GST. But your options depend entirely on one question: did your company lodge its BAS and activity statements on time?
Lodged on time, didn't pay
You have a non-lockdown DPN. You have options. You have 21 days to act.
Did not lodge within three months
You have a lockdown DPN. Your only way to extinguish it is to pay in full - but there are still things we can do.
Your DPN letter will tell you which type you have. If you are not sure, call us and we will help you work it out.
If you have a non-lockdown DPN, you have 21 calendar days from the date on the letter. Not from when you received it. Not from when you opened it. Weekends and public holidays count.
Find that date now. Count forward 21 days. Write the deadline down. Everything you do from here is governed by that date.
These are the four most common and costly mistakes directors make when they receive a DPN.
Answer two questions to understand your situation and your options.
Answer two questions to understand what type of DPN you have and what your options are.
Did your company lodge its BAS and activity statements on time?
"On time" means within three months of the due date.
This is what to do in the next 48 hours. The directors who act early almost always come through it. The ones who freeze rarely do.
Hour 1
Find the DPN letter. If it went to an old address, contact the ATO to request a copy.
Identify the issue date. Calculate your 21-day deadline. Write it down somewhere you will see it every day.
Work out whether it is non-lockdown, lockdown, or a combination.
Note the total amounts. Break them down by PAYG, SGC, and GST.
Hours 2-4
Log in to the ATO Business Portal, or ask your accountant to check, and confirm the lodgement status of all BAS, IAS, and SGC statements.
If anything is overdue by more than three months, lodge it immediately. You cannot undo a lockdown for past periods, but you can prevent further lockdown DPNs from accruing.
Check the amounts in the DPN against your own records. Errors and misallocations are not uncommon.
Hours 4-8
Build a quick snapshot: bank balances, outstanding debtors, upcoming payments, available credit.
Can the company pay the DPN debt in full within 21 days? If yes, arrange payment.
If not, can it realistically service a repayment arrangement over 6 to 12 months?
Is the ATO debt the only pressure, or is it a symptom of broader financial distress?
Hours 8-24
Talk to someone who has dealt with DPNs before. Your regular accountant or bookkeeper may be excellent at what they do, but DPN strategy is a specialist area.
A single conversation with someone who understands the ATO's playbook can make the difference between losing everything and finding a way through.
Hours 24-48
Choose your path. Begin implementation immediately. Every day that passes is a day you cannot get back.
Document everything. Keep a record of every step you take, every conversation, every decision.
"The directors who act early almost always come through it. The ones who freeze rarely do."
These are real scenarios, with names and details changed. They show how differently things can turn out depending on the decisions made in those first few days.
Steve - Civil Construction
$2.4 million DPN
Steve was the sole director of a civil works contractor with 85 employees across three state government infrastructure projects. A disputed variation claim left a $3 million hole in cash flow. PAYG and GST fell behind. When the DPN arrived for $2.4 million, Steve assumed he was finished. But his accountant had kept all BAS lodgements current, making the DPN non-lockdown. Steve called us on day two. We helped him appoint a voluntary administrator within 14 days. The administrator negotiated a Deed of Company Arrangement that reduced unsecured debts by 55%.
Outcome: Steve's personal liability was entirely remitted. The business continued trading, 85 jobs were preserved, and Steve kept his house and his family's financial security.
Karen - Transport and Logistics
$1.8 million DPN
Karen and her husband ran a freight business with 40 trucks and $28 million in revenue. When fuel costs spiked and two major customers left, they fell behind on PAYG and super across four quarters. Karen received a non-lockdown DPN for $1.8 million but assumed a payment plan would protect her. She spent the entire 21-day window negotiating. The ATO agreed to a plan. But because no formal appointment was made, Karen's personal liability crystallised.
Outcome: Karen and her husband were both declared bankrupt. They lost their family home. The lesson: a payment plan does not remit a DPN.
Anthony - Manufacturing
$3.1 million DPN
Anthony was the managing director of a food manufacturer employing 120 people. After losing a major supermarket contract, the finance manager stopped lodging BAS and SGC statements without telling Anthony. By the time the DPN arrived for $3.1 million, lodgements were 14 months overdue. The entire DPN was lockdown. Voluntary administration would have no effect.
Outcome: Anthony refinanced the family home to raise $1.9 million and negotiated a personal payment arrangement for the remaining $1.2 million over five years. The process consumed eighteen months and placed enormous strain on his family. The lesson: lodge on time, every time.
David - Consumer Retail
$1.2 million DPN (new director)
David joined the board of a retailer with 14 stores without checking ATO compliance. Within six weeks he discovered three quarters of unlodged BAS and $1.2 million owing. His 30-day grace period had already expired.
Outcome: Statutory defences were available, but establishing them required months of legal argument, significant fees, and stress that affected his health and family. Even when the law is on your side, fighting a DPN is gruelling. The lesson: the cost of due diligence is trivial compared to what follows if you skip it.
84,000+
DPNs issued in FY2025
A 136% increase on the prior year
$36B
ATO collectable debt from small business
The ATO is actively recovering
10.65%
GIC interest rate (Jan-Mar 2026)
Compounding daily. No longer tax deductible from 1 July 2025
1 in 3
Businesses with >$100k debt, >90 days overdue
Failed within 12 months
This section is here for when you want the complete picture. You do not need to read it before calling us.
Brendan Richards
Founder & Senior Advisor, Rebound Advisory
Brendan has spent over 25 years in corporate restructuring and turnaround advisory, including senior roles at PwC, KPMG, and Ferrier Hodgson. He has advised directors across construction, manufacturing, retail, agribusiness, and professional services on navigating financial distress - including responding to Director Penalty Notices, negotiating with the ATO, and implementing Safe Harbour plans.
He founded Rebound Advisory to bring that level of expertise to privately owned businesses - the ones who need it most but have historically had the least access to it.
Claire Gaffney
Senior Advisor, Rebound Advisory
Claire brings experience from KPMG, Pitcher Partners, and ANZ, with particular expertise in agribusiness restructuring, stakeholder management, and working with lenders and creditors through complex informal workouts. She has supported directors through ATO negotiations and DPN responses across multiple sectors.
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© 2026 Rebound Advisory. General information only - not legal, tax, or financial advice.
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This guide was produced by Rebound Advisory. It is intended as general information only and does not constitute legal, tax, or financial advice. Every situation is different. If you have received a Director Penalty Notice, seek specialist advice specific to your circumstances before taking any action. © 2026 Rebound Advisory. All rights reserved.