In a recent article, Heffron head of SMSF technical and education services Lyn Formica reminded directors of corporate trustees that they will need to apply for a director ID by 30 November 2022.
Despite the deadline fast approaching, Ms Formica said there is still a lot confusion around who needs to apply.
Ms Formica warned that some former directors may not be aware that anyone who was a director of a company on 31 October 2021, has since ceased all of their directorships, and has no intention of ever being a director again will still need to apply for a director ID.
“For example, someone who wound up their SMSF and deregistered their trustee company since 31 October 2021 still needs a director ID,” Mr Formica explained.
“The legislation simply didn’t build in carve-out for these former directors.”
While the ATO has recently confirmed that they will provide an exemption for directors who have since died, Mr Formica said the industry is still waiting for a similar exemption for other former directors, including those that have lost mental capacity.
“Hopefully this confusion will be resolved shortly,” said Mr Formica.
Last month the government launched an awareness campaign for director IDs targeting SMSFs as well as small business, charities, and not-for-profits.
ATO data last week revealed that less than half of the 690,000 directors in the SMSF sector were yet to apply for an ID.
The uptake is even worse for the overall director population, with ATO figures to 19 October revealing around 1 million directors had applied for an ID from an estimated population of 2.5 million.
The application process is also a part of the problem. Just last week we tried to assist an elderly client obtain a DirectorID via the phone process to be met with an extremely rude and unhelpful call centre respondent. And, despite persisting with the long wait times and the unpleasant interface, we were not able to get through the mandatory identification step. The client’s original birth certificate was not registering in the online database due to its age. We now have to undertake a separate identification process to get to the starting gates.
Elderly people that have capacity, but may lack IT, or process skills, and/or even simply have hearing problems, need assistance with this. The removal of the paper application for all but overseas directors has made the process more difficult than it needed to be.
That’s what happens when you have systems and processes designed by lifetime bureaucrats and IT boffins who don’t live and transact in the real world.
Australia has been slowly drowning in red tape and needless bureaucracy for years, driven by these peanuts, and now the water is lapping at our nostrils.
It won’t be long before we sink beneath the waves.
One has to ponder why on earth they removed the paper application (for Australian residents) however the internet archive is a very handy site! Here is the paper application for Australia residents: https://web.archive.org/web/20220331022037/https://www.abrs.gov.au/sites/default/files/2021-10/Application_for_a_director_identification_number.pdf