Before 30 June: The Director Duties That Catch Business Owners Out
End of financial year is when a set of director obligations quietly become urgent. In several important areas the law makes directors — not the company — personally liable for unpaid tax, and the window to act is shorter than most owners expect. The good news is that these risks are manageable with a little preparation.
The corporate shield has gaps
Running a company usually means limited liability: the company owes its debts, not you. For most things, that holds true. But for three specific taxes — PAYG withholding, the Superannuation Guarantee and GST — the ATO can reach past the company and make directors personally responsible. The reasoning is that this money was always being held on trust for the government, so the usual protection does not apply.
The tool the ATO uses is a Director Penalty Notice (DPN). Once one is issued, you have 21 days to act — and that period runs from the date on the notice, not the day it lands in your inbox or letterbox. By the time it reaches you, the real window can be closer to a fortnight. Speed matters: directors who engage early keep their options open; those who wait often find the options have already closed.
Key takeaway
Limited liability is real, but it does not cover PAYG withholding, super or GST. In those areas the debt can become the director's personal responsibility — and the time to deal with it is measured in days, not months.
Three assumptions that get directors into trouble
- “The company owes the debt, not me.” Not for PAYG withholding, super and GST. Limited liability is real, but it does not protect you here.
- “We’ll sort it out after tax time.” Waiting rarely buys time — it usually removes choices. The earlier you act, the more paths stay open.
- “I’ve resigned, so I’m in the clear.” Resignation does not wipe debts that arose while you were a director, and it only limits future liability if it is properly lodged with ASIC in time.
Your end-of-year checklist
A few things are worth confirming before 30 June.
Before 30 June
- Lodgements are up to date. Even if you cannot pay in full, lodging on time keeps the better options open and gives you room to negotiate.
- Q4 super is sorted. Super is only deductible in the year the fund actually receives it — so if you want the deduction this year, the payment needs to land before 30 June.
- Trust distributions are resolved. If you run a family trust, the decision about who receives its income generally needs to be made and documented before 30 June, or the trustee can be taxed at penalty rates. The paperwork must be done at the time — it cannot be backdated.
- Solvency is genuinely considered. Proprietary companies pass a solvency resolution each year. It is a real declaration, not a formality — signing it when the company cannot actually pay its debts carries its own personal risk.
- ASIC details are current. Keep your company’s officeholder and address details accurate, and pay the annual review fee on time.
The common thread: act early
If your business is under cash-flow pressure or carrying an ATO debt, the worst thing to do is nothing. Payment plans, restructuring and other options are available — but each has a deadline, and they fall away the longer you wait. Early, honest engagement almost always produces a better outcome than a last-minute scramble.
Important
Most options that protect a director — payment plans, voluntary administration, restructuring — only exist within a set window. Doing nothing is the one choice that removes them all. If money is tight, raise it early.
How we can help
These obligations sit across tax, accounting and the law — which is exactly where having them looked at together makes the difference. At The Quinn Group, our senior-led team can review your position before you sign anything, make sure your year-end housekeeping is in order, and step in early if there is an ATO issue building. If you are a company director heading into 30 June, now is the time to check where you stand.
Need Help?
This article provides general information and should not be considered legal or tax advice. For personalised guidance, please contact our expert team of tax accountants at The Quinn Group by calling 1300 QUINNS (1300 784 667) or +61 2 9223 9166, or submit an online enquiry form to arrange an appointment.
