Australian Taxation Office ramps the pressure on company directors in its bid to claw back the billions

Tax officials have tripled their efforts to make directors pay for billions in debts owed by company liquidations, with tens of thousands of people targeted.

The ATO issued 84,000 DPNs in the 2025 financial year, up from just 26,700 the year before.

The Australian Taxation Office has ramped up the pressure on company directors in its bid to claw back the billions of dollars it’s owed.

Analysis by insolvency experts Jirsch Sutherland have revealed a sharp increase in directors being held personally liable under the ATO’s Director Penalty Notice regime.

According to the latest data, the ATO issued 84,000 DPNs in the 2025 financial year, up from just 26,700 the year before – a threefold increase that reflected a much tougher compliance stance.

Jirsch Sutherland Melbourne partner Andrew Mattinson said the ATO’s tougher stance was part of it reining in a $105bn debt, much of which stemmed from leniency during the covid pandemic.

“There was an accumulation of debt over that period and, now that the effects of covid have faded, people are still in financial trouble,” he said.

“In many cases the ATO was used as a bank and the ATO was typically the last one getting paid out of all the creditors and it was usually the largest creditor.

“Typically if there is enough pressure put on by the ATO, the directors don't want to lose their personal property. They tend to come to some arrangement with the ATO.”

The Australian Taxation Office has ramped up the pressure on company directors in its bid to claw back the billions of dollars its owed.

Jirsch Sutherland said some directors had claimed they never saw the notice – a defence that was unlikely to work as once a DPN is sent to the ASIC-registered address, it is deemed served – whether it’s opened or not.

And it can be an unforgiving system.

An adviser contacted Jirsch Sutherland about placing a company into liquidation, but failed to mention that a DPN had already been issued. By the time the paperwork was prepared, the 21-day deadline had passed, by just a single day.

That delay meant the notice converted from ”non-lockdown” to “lockdown”, leaving the director personally liable for hundreds of thousands of dollars, with no way out but to pay.

However, Mr Mattinson said DPNs were not designed to send directors bankrupt because the ATO would not get all they money they were owed.

“The threat should be enough to get some sort of response from directors,” he said.

Originally published as Australian Taxation Office ramps the pressure on company directors in its bid to claw back the billions