7 Proven Ways to Handle a Lockdown DPN With Confidence
A Lockdown DPN is the tougher of the two notices the ATO can send a director, but tougher doesn’t mean hopeless. Lodgement dates decide which type you hold and which options stay open. These seven steps show how to tell the two apart and take back control with a clear plan.
⚠ Check the date on your notice today. The count starts from that date, not from when you open the letter. |
⚠ We strongly advise against telephoning the ATO as a first move. Get specialist guidance from Risk Protector first. |
Every DPN falls into one of two types. Non-Lockdown notices leave several ways to clear the personal penalty. Lockdown notices leave fewer, but they still leave some. For a Non-Lockdown notice, apart from paying, the ways out come from the Corporations Act 2001: appointing a voluntary administrator under section 436A, appointing a small business restructuring practitioner under section 453B if the company qualifies or starting a voluntary winding up under section 491.
The type of DPN isn’t picked at random. It depends almost entirely on whether the company lodged its BAS and super statements on time, whether or not it had the money to pay.
Once you know which type you’re holding, the next steps get much clearer. Here’s how to work through it.
Know What Makes a Notice Lockdown
A notice becomes Lockdown when the company didn’t report its PAYG withholding or GST within three months of the due date. For super, the trigger is failing to lodge a Super Guarantee Charge statement by its due date.
In plain terms, the ATO gives more room to companies that report honestly even when they can’t pay. It’s the silence, not the size of the debt, that locks a notice down.
That’s what separates a Lockdown DPN from the other kind. The reporting history decides it, so it’s the first thing to check when a notice lands.
The same company can receive both types over time. One quarter might be reported late and another on time, so a single letter can sometimes list periods that are treated differently.
Understand What a Non-Lockdown Notice Allows
A Non-Lockdown notice gives a director a real window. Within 21 days of the date on the notice, the penalty is remitted if the company pays the debt, appoints a voluntary administrator or small business restructuring practitioner or begins to be wound up.
None of those are small decisions. Each one has consequences for the company, its staff and its future. The window is short, so having your records and your own advisers lined up early helps a great deal.
Paying the debt in full is the cleanest option where the money exists. It clears the penalty and lets the company keep trading without an outside appointment.
Voluntary administration and small business restructuring are built for companies that may be able to trade on with a deal in place. Winding up is generally for companies that can’t. Each suits a different set of facts, which is why early advice pays off.
Understand What a Lockdown Notice Leaves Open
With a Lockdown notice, appointing an administrator or liquidator won’t remit the penalty. Paying the debt is the main way to clear it. It isn’t the only way out.
A Lockdown notice doesn’t take away the defences in the law. You aren’t liable if illness or another good reason kept you out of running the company. The same goes if you took all reasonable steps to make the company pay or go into administration or liquidation. For GST and super, a reasonably arguable position the company relied on can also count.
A strong director penalty notice defence is built on facts and records. Test it early with your own lawyer, well before any recovery action starts.
Gather any medical records, emails or meeting notes from the periods listed as soon as you can. Evidence written at the time is far more convincing than an explanation put together months later.
A Lockdown notice also doesn’t always mean the debt has to be paid in one hit. Where no defence applies, the ATO may agree to a payment plan, although interest keeps running while it’s in place.
Check the Dates Before Anything Else
Start with the date printed on the notice and the periods it lists. Compare each one with your BAS and super lodgement records.
Sometimes the notice type or the amounts don’t match the records. Errors do happen and a mismatch can change your position. It’s worth going through the notice line by line with the paperwork in front of you.
Also check the address the notice was sent to. The ATO generally uses the address on the ASIC register, so if yours is out of date it’s worth updating it now so future letters reach you.
If something doesn’t line up, write it down with the page and period it relates to. A clear list makes it much easier for your own lawyer or accountant to raise the problem with the ATO.
⚠ A late lodgement can result in a Lockdown DPN. Keep every BAS and super statement up to date. |
Keep Lodging While You Work It Out
Even after a notice arrives, lodging every outstanding BAS and super statement matters. It may not change the notice in your hand but it can stop later periods from being locked down too.
Think of lodgement as the one thing that’s always within your control. Payment may not be possible this month. Reporting almost always is.
Regular lodgement also shows the ATO a company that’s engaging rather than hiding. In some cases that can make later conversations about payment plans easier.
If the company has fallen behind on several quarters, start with the oldest period that’s still inside the three month line. That’s usually the one closest to being locked down.
Protect What’s Yours the Legitimate Way
Good structure is set up early and openly, well before a notice turns up. It separates trading risk from personal assets in ways that hold up when they’re tested.
Transfers made once trouble is visible or while a company is insolvent may be reversed. Late moves rarely help and can make your position worse.
In practice that means knowing which assets sit in your own name, which sit in a company or trust and which guarantees you’ve signed over the years. It’s ordinary housekeeping that many directors never get around to until a letter forces the issue.
Get a Clear Map of Your Exposure
Risk Protector’s free A13 assessment looks at your entities, guarantees, lodgement history and how your assets are held. It shows where a notice could reach and what to look at first.
It also looks at guarantees you may have forgotten about, such as those signed for leases, equipment finance or supplier accounts years ago.
The assessment takes around 20 to 30 minutes online and rough answers are fine. We aim to reply in writing within about 48 business hours with a ranked view of where your exposure sits. Every assessment is reviewed personally, not run through a template.
When we talk about specialist help, we mean Risk Protector, not your accountant. Risk Protector looks at the company’s position as well as your own: its structure, its exposure and where a notice could reach your personal assets.
Your accountant’s knowledge of the company’s figures is valuable but it’s worth noting where their priorities sit. Accountants are registered with the Tax Practitioners Board to deal with the ATO. They generally won’t give advice that could put that registration at risk, which means their own interests come first, ahead of the director’s personal exposure.
Where documents help, we prepare drafts for your own lawyer and accountant to review before anything is signed. We don’t give legal, tax or financial advice.
KEY POINT: The type of DPN you hold decides which doors are still open. Contact Risk Protector For Their Take on the Subject Get a clear read on your structure while you still have choices. The A13 assessment is free and confidential. |
The Street-Smart Advisory Team
RiskProtector.com.au
Contact | www.riskprotector.com.au
Questions Directors Ask About the Two Notice Types
How long do I have to act on a Non-Lockdown notice?
A Non-Lockdown DPN gives you 21 days from the date on the notice to pay, appoint an administrator or restructuring practitioner or start winding up the company. After that the penalty can’t be remitted that way, although the defences in the law still remain.
Do weekends count in the time I have?
Yes. The DPN 21 days are calendar days counted from the date printed on the notice, with weekends and public holidays included. A slow postal service doesn’t extend them.
Can a Lockdown notice be changed if we lodge now?
Lodging late won’t turn a Lockdown director penalty notice into the other type for the periods it already covers. It can still protect later periods and it shows the ATO you’re engaging.
Why is a Lockdown notice harder to deal with?
A Lockdown DPN can only be cleared by paying the debt, unless a statutory defence applies. That’s why checking the defences early matters so much. Putting the company into administration or liquidation won’t remit it.
KEY POINT: The type of DPN you hold decides which doors are still open. Contact Risk Protector For Their Take on the Subject Get a clear read on your structure while you still have choices. The A13 assessment is free and confidential. |
RISK PROTECTOR
riskprotector.com.au | Contact
This article is general information only and does not constitute legal, financial, taxation or financial product advice. It doesn’t consider your objectives, financial situation or needs. RiskProtector.com.au provides structural and strategic advisory, strategic mentoring and draft document preparation for directors and business owners. This isn’t legal, financial or taxation advice and isn’t a substitute for it. All content is for educational and informational purposes only. Readers should obtain independent professional advice relevant to their specific circumstances before acting. © 2026 Risk Protector. All rights reserved.
Risk Protector Pty Ltd ABN 71 696 228 770 trading as RiskProtector.com.au