Director penalty notices for new and resigned directors

Resigning as a director usually doesn't end your exposure to a director penalty notice (DPN). You generally stay personally liable for the company's unpaid PAYG withholding, GST and super guarantee charge that relate to your time on the board, even if the debt fell due after you left. New directors can also become liable for debts already overdue when they joined, unless the company deals with them within 30 days.

It all turns on dates: when each debt arose, when it fell due, and when your appointment or resignation took effect. For how DPNs work generally, see director penalty notices.

Are you liable after resigning as a director?

Usually yes, for amounts connected with your time on the board.

Each obligation has an "initial day", when it arises, and a "due day", when the company must pay. Anyone who is a director at any time on or after the initial day must cause the company to pay, appoint an administrator or small business restructuring practitioner, or begin to be wound up (Taxation Administration Act 1953 (TAA), Sch 1 s 269-15). If none of that has happened by the end of the due day, everyone who was a director at any time from the initial day to the end of the due day is liable to a penalty equal to the unpaid amount, even if they left before the due day (TAA Sch 1 s 269-20(1) and (5)).

You are generally not liable for an obligation whose initial day falls after your resignation took effect. But resigning on paper isn't enough if you keep running the business. The DPN rules apply to directors "within the meaning of the Corporations Act 2001" (TAA Sch 1 s 269-15(1)), which includes a person who acts as a director, or whose instructions the board usually follows, even without a valid appointment (Corporations Act 2001, s 9AC).

Which debts follow you

The ATO's practice statement on DPN enforcement, PS LA 2011/18, says a resigned director stays liable for debts already due when they resigned, and for later debts in these cases (para 56):

Debt	When the obligation arises (the initial day)	ATO view: still liable after resigning if
PAYG withholding	Each day the company withholds an amount, usually from wages	the first withholding in the reporting period was before you resigned
GST	The last day of the tax period	the tax period ended before you resigned
Super guarantee charge	For quarters ending on or before 30 June 2026, the last day of the quarter. For wages paid from 1 July 2026, each "QE day": a day the company pays an employee qualifying earnings, broadly a payday (Superannuation Guarantee (Administration) Act 1992, s 17A(1))	the reporting period ended before you resigned (this guidance predates Payday Super)

Two rows need care (TAA Sch 1 s 269-10(1), items 1 and 5). For PAYG withholding, the Act treats each amount withheld as its own obligation, with the day it is withheld as its initial day. On that wording, the better view is that if you resigned part-way through a period, you aren't liable for amounts the company withheld after your resignation took effect, even though the ATO's test would cover the whole period. No court has decided the point, so get advice if a DPN includes those amounts. For super, the ATO's test still matches the law for quarters ending on or before 30 June 2026, which continue under the former rules (Treasury Laws Amendment (Payday Superannuation) Act 2025, Sch 1, item 183). For wages paid from 1 July 2026, the Act looks at each payday, so you can generally be liable for unpaid super on wages paid before your resignation took effect, whatever the ATO's older guidance says.

For example, suppose your resignation takes effect on 15 October (ASIC was notified in time) and the company hasn't paid its September quarter GST, which falls due after you leave. You can be personally liable for that GST, because the quarter ended while you were a director, but not under the DPN rules for the December quarter's GST.

Lockdown penalties follow you too

If the company didn't report its PAYG withholding or lodge its GST return within three months of the due day, or, for super guarantee charge, didn't lodge a voluntary disclosure statement (for quarters ending on or before 30 June 2026, its super guarantee statement) by the due day, the penalty is "locked down" to the extent of the unreported amount: administration, restructuring or liquidation won't remit it (TAA Sch 1 s 269-30(2)). That applies to former directors too, so activity statements left unlodged when you go can lock down your penalty. Under payday super, the due day for super is no later than the day after the 60-day period starting on the payday (s 269-10(3)). See how lockdown DPNs work.

A DPN can arrive long after you leave

Division 269 sets no time limit for issuing a DPN. The ATO says it aims to issue them as soon as practicable after a penalty is incurred (PS LA 2011/18, para 48), but a notice can still reach a former director much later, for example after the company has gone into liquidation. See director penalty notices after liquidation.

The regime has also widened. It originally dealt with amounts the company withheld, such as PAYG withholding from wages. Super guarantee charge was added by the Tax Laws Amendment (2012 Measures No. 2) Act 2012, for quarters whose super guarantee statement was due on or after 30 June 2012. GST was added by the Treasury Laws Amendment (Combating Illegal Phoenixing) Act 2020, for tax periods and GST instalment quarters starting on or after 1 April 2020.

Why your ASIC record matters

Where the ATO sends the notice

The ATO can leave or post a DPN to an address that ASIC's information shows as your home or business address, or showed within the last seven days (TAA Sch 1 s 269-50). The notice is taken to be given when it is posted or left, not when you receive it, and your 21 days start then (TAA Sch 1 s 269-25(4)).

If you have given the ATO your registered tax agent's address as your address for service, it may also send the agent a copy, but a copy doesn't change when the notice was given (TAA Sch 1 s 269-52).

If ASIC holds an old address for you, a DPN posted there can generally count as given even if you never see it, so the 21 days can pass before you know it exists.

When your resignation took effect

A director can usually resign by giving written notice to the company at its registered office (Corporations Act s 203A, a replaceable rule). The company must notify ASIC within 28 days (s 205B(5)), or you can notify ASIC yourself, attaching your resignation letter (s 205A).

If you resigned and stopped being a director on or after 18 February 2021, the timing of that notice matters (Corporations Act ss 203AA and 1661(2)):

When ASIC is notified	When the resignation takes effect
Within 28 days after you stopped (by you or the company)	The day you actually stopped
Later	The day notice is lodged with ASIC, unless ASIC or a court fixes the earlier date

To fix the earlier date, you or the company must apply to ASIC within 56 days after you stopped, or to the court within 12 months or a longer period it allows, and satisfy ASIC or the court that you did stop on that day (s 203AA(2)–(5)). ASIC must have regard to the reasons for the delay in notifying it, and the court must be satisfied it is just and equitable. A later effective date can bring more tax periods within your obligation.

Backdating and the last director

These rules are aimed at backdated resignations. Lodging a notice today saying you resigned two years ago generally won't make it effective from then unless a court fixes that date. A resignation also doesn't take effect if it would leave the company with no director, unless winding up has begun (s 203AB).

If ASIC wasn't notified within 28 days, evidence that you stopped earlier (the signed letter, proof of delivery, records showing you stopped acting) generally only helps through an application to ASIC or the court.

Are new directors liable for existing tax debts?

They can be. If you become a director after a debt's due day, you become personally liable for it if, 30 days after your appointment, the company still hasn't paid, appointed an administrator or small business restructuring practitioner, or begun to be wound up (TAA Sch 1 s 269-20(3)). The penalty is due at the end of that 30th day (s 269-20(4); PS LA 2011/18, para 55).

For example, suppose you join a company that owes $100,000 in overdue GST and PAYG withholding. If nothing has changed 30 days later, you can face a $100,000 penalty, the same as the existing directors. A payment by the company or any director reduces everyone's liability (TAA Sch 1 s 269-40).

A payment arrangement doesn't stop the penalty arising. While one covering the debt is in force, the ATO can't start, or take a step in, court proceedings to recover the penalty, but it can still issue a DPN (s 269-15(3)). See payment plans for director penalty notices.

Debts that fall due after you join

The 30 days only covers amounts already overdue when you join. If you join after a tax period ends but before its due day, the penalty arises at the end of the due day like any other director's (s 269-20(1)). For example, join in mid-October and the September quarter's GST, usually due within weeks, gets no 30-day grace.

Lockdown: three months to lodge

For PAYG withholding and GST, if you join during or after the three months following the due day, the three months run from your appointment instead (TAA Sch 1 s 269-30(3)). The ATO's guidance is that those penalties aren't locked down for a new director if all required lodgements, including old ones, are made within three months of appointment. This extension doesn't cover super guarantee charge (s 269-30(3) covers only the PAYG withholding and GST items; PS LA 2011/18, para 61).

Lockdown only matters once your 30 days have passed. If the company appoints an administrator or small business restructuring practitioner, or begins to be wound up, within the 30 days, your obligation ends before any penalty arises (TAA Sch 1 ss 269-15(2) and 269-20(3); PS LA 2011/18, para 55).

Before you accept an appointment

Ask to see:

• the company's ATO account statements, showing what is overdue
• its lodgement history, including anything unlodged
• any payment arrangement and whether it is being kept
• any DPN already issued to an existing director
• evidence that employee super has been paid on time

If you join a company with overdue tax, diary the dates 30 days and three months after your appointment.

What to do if you get a director penalty notice after resigning

1. Work out your deadline. Count the 21 days from when the notice was posted or left, not when you opened it (TAA Sch 1 s 269-25(4)). See what to do after a DPN.
2. Check each amount against your dates. A notice may include amounts whose initial day falls after your resignation took effect, such as later tax periods or PAYG withholding from wages paid after you left.
3. Talk to the remaining directors. You can't appoint an administrator yourself, but if the current directors do, or the company begins to be wound up, within your 21 days, your penalty is remitted too, except for locked-down amounts (TAA Sch 1 s 269-30(1)).
4. Look at the defences. Reasonable steps are judged having regard to when, and for how long, you were a director and took part in management (s 269-35(3)). If the ATO recovers the penalty other than through court, for example with a garnishee notice to your bank (TAA Sch 1 s 260-5), a defence generally only applies if you give the ATO the supporting information within 60 days starting when it gives you a copy of the garnishee notice or tells you in writing that it has recovered some of the penalty (s 269-35(4A); PS LA 2011/18, para 71). You can raise a defence earlier, and in court you must prove it (s 269-35(4)). See defences to a director penalty notice.
5. Know your rights. If you pay, you have rights of indemnity and contribution against the company and other directors, as if you were all guarantors (s 269-45).

Steps to take when you resign

• Resign in writing to the registered office and keep proof of delivery.
• Lodge the notice with ASIC yourself, with a copy of your resignation letter (Corporations Act s 205A), or confirm well within the 28 days that the company has.
• Stop acting as a director, including dealing with the ATO for the company.
• Make sure ASIC has your current address (ss 205B(4) and 205C(2)).
• Record what has been lodged and what is owing on the day you leave.
• If the company can't pay its PAYG withholding, GST or super, deal with it while you still have the power to act.

How we help

• Check the dates. We work out which periods on a DPN you can be liable for, working with your accountant where you have one.
• Fix the record. We advise on applying to ASIC or the court to fix a resignation date, where that is still open.
• Deal with the ATO. We prepare defence submissions and negotiate the timing of recovery.

Next step

Send us the DPN if you have one, your appointment and resignation dates, any resignation letter and a current and historical ASIC company extract. If you are about to join a board, send the company's ATO account statement and lodgement history. We'll tell you which amounts you can be liable for, which deadline is running and what to do first.