Tax Debt
DPNs – The ATO can collect the same ‘debt’ from many people
The ATO can issue director penalty notices (DPNs) to directors of a company, where that company has unpaid: Pay as You Go withholding (i.e. the tax component of staff wages)Superannuation Guarantee Charge (i.e. the super component of staff wages)Goods and Services Tax (only for GST owed due from the quarter starting 1 April 2020 ...
Types of Director Penalty Notices (DPNs)
A director penalty notice (DPN) is a notice that the ATO can issue to a director of a company that has unpaid debts. There are two types of DPNs – a standard DPN, or a ‘lockdown’ DPN. A DPN can make the director personally liable for unpaid PAYG withholding tax, a superannuation guarantee charge ...
All about the general interest charge
If you have a tax debt, then you already know that the ATO charges you interest on it. This is the 'general interest charge' (also known as the GIC). The rate of the general interest charge is calculated each quarter. It is roughly equal to around twice a standard mortgage rate. The exact ...
What happens to a tax debt during an objection or appeal?
If you've been audited by the ATO or received an estimate of tax, then you may not agree with the new amount the ATO says you owe. You have options for disputing these debts. Usually, the first step is to object to the ATO's decision about the debt. If the objection isn't decided in ...
Looking for a template letter to make a remission request to the ATO?
There's a template letter online for making a remission request to the ATO for the general interest charge. It's designed for accountants to use for their clients. I do not recommend using this template letter unless you're an accountant who knows what you're doing and you have solid writing skills. Why don't I recommend ...
How the ATO’s general interest charge works
The ATO charges the general interest charge (the GIC) on most unpaid tax debts. There is legislation that sets out how to calculate the rate of the general interest rate. You can read more about that here. Daily compounding The rate determined under the law is an annual rate. However, the general interest charge imposed by ...
The rate of the ATO’s general interest charge
The ATO charges general interest charge on most unpaid tax debts. The rate of the general interest charge is set each quarter. The ATO usually announces the rate two weeks before the start of the quarter. Recent general interest charge rates In recent times, the rate has hovered around 8 to 9%: QuarterAnnual rateJanuary – March 20207.91%October ...
Statutory demands issued by the ATO
The way the ATO collects a tax debt differs depending on whether the taxpayer is an individual or a company.
The first few steps are generally the same - phone calls, letters, perhaps a garnishee notice. For a company, the ATO may also issue a Director Penalty Notice to the directors, making them personally ...