Director Penalty Notices - 21 Days to Act — or you’re personally liable
21 Days to Act: What Australian Directors Need to Know About DPNs.
What is a Director Penalty Notice?
A Director Penalty Notice (DPN) is a letter from the Australian Tax Office (ATO) that can hold company directors personally liable for unpaid company tax debts — including PAYG, GST, and superannuation.
There are two types of DPNs you need to know:
1.The Standard DPN
This gives directors 21 days from the date of the notice to take action — by paying the debt, appointing a liquidator, or putting the company into voluntary administration.
If you act within this window, you can often avoid personal liability.
2. The Lockdown DPN
This applies when a business has failed to lodge its BAS or PAYG within 90 days of the due date.
At this stage, the debt has already been transferred to you personally — meaning it’s recorded on your personal tax portal, and it’s too late to reverse.
Why Timing Matters
The difference between a 21-day DPN and a Lockdown DPN is timing.
If you’ve missed your lodgement deadlines, even by a few months, the ATO can bypass your company entirely and pursue you directly.
How to Protect Yourself
Always lodge your BAS and PAYG on time, even if you can’t pay immediately.
If you’ve received a DPN letter, seek professional advice right away.
Avoid ignoring ATO correspondence — 21 days goes fast.
Need Help?
At BDK Risk Management, we help business owners respond to DPNs quickly and strategically — before they become personal tax debts.