Director Penalty Notices: How to Handle Them
Directing a company comes with a lot of responsibility. Financial responsibility is often an expectation. Even if you are not directly in charge of filing taxes, you can be held responsible by the tax agency. If the company you work for is going through an audit, you may receive a letter informing you of the situation and the consequences that you must pay. This is called the director penalty notice. You must respond to this letter if you intend to fight the charges. Otherwise, you can be found guilty by default and money can be taken from you for payment.
You must let the tax agency know that you have received the letter as quickly as possible. Respond by calling or writing back immediately so you are not found guilty by default. There is a proper form letter that can state your intent to defend yourself against the allegations. Research online to find a director penalty notice defence letter example. It is common for directors to ignore the notice. This makes it easy for the tax agency to move forward with monetary penalties. There is no need to pay money to the tax agency if you are not at fault. Stay informed and respond each time the tax agency reaches out to you.
It can be easy to get upset when you realise money may be taken from you. Even if you are sure that you are not at fault, you may begin to have some self doubt. Auditors often win the battle because individuals become flustered or give up. You may feel more comfortable having a lawyer with you when you meet with the lawyer. You can also see to it that the accountant for the company is reviewing all the year’s financial documents. Try to relax and listen to what the auditor has to say and do not offer any information in return. You need to find out why they are auditing the company.
Collaborate with the Other Directors
You are probably not the only person that received a letter. Find out who else received the penalty notice. If you are the only one protesting, you may have a harder time making progress. If everyone works together, you may be able to accomplish something. You may even be able to get a lawyer to represent you as a group since it is all for the same issue. Discuss the situation with each other, as well. You may be able to find out what the issue is and resolve it by finding out what the others know.
Director penalties may not seem fair, especially if someone else oversees the financial part of the business. The tax agency, however, is just looking for someone to pay the missing money. You must prove that the allegations are false or that you are not responsible for the issue. Send in a proper defence letter, stay calm, and work together with the other directors and a lawyer.