Earlier this week the ATO reported that that there were still 800,000 directors still yet to apply for their ID including 230,000 SMSF directors.
In a recent online article, SMSF Alliance principal David Busoli said that undoubtedly, one of the reasons for the shortfall had been the digital process and the inability for this to be outsourced.
“Recognising this, in the last couple of weeks paper forms have been resurrected and mailed to errant directors,” said Mr Busoli.
“Another reason for the shortfall is our general tendency to leave things to the last minute – around a third of all applications have been received since October.”
Mr Busoli said that missing the 30 November deadline could involve a maximum criminal penalty of $13,200, or up to $1,100,000 under civil law but, given the large percentage of the director population that will have failed to comply, the ABRS have a problem.
“As Director IDs are required to clamp down on dodgy dealings there is no doubt that, ultimately, directors who fail to apply will be subject to penalties, but I’d be confident that we can expect an extended deadline to be announced in due course and, in any case, directors who have failed to apply in time will be given the opportunity to explain why,” he stated.
However, SMSF professionals should still keep the pressure on director clients to apply as applying now will “save a whole lot of unnecessary paperwork”, he said.
Earlier this week, an ATO spokesperson said its broad awareness campaign had resulted in “strong application numbers”, which are trending up as the deadline approaches.
“Around a third of all applications have been received since the beginning of the awareness campaign in October,” the ATO said. “As of Tuesday 22 November, over 1.5 million directors have applied for their director ID.
“Where people have a legitimate reason why they cannot apply by the deadline, they can expect that we will take a reasonable and pragmatic approach.”
ABRS deputy registrar Karen Foat said this week’s application numbers were encouraging but some people might still be unaware the system applied to them.
“Some people might not actually realise they are a director of a company. You don’t have to wear a suit or work in an office to be considered a director,” she said.
“If you run a small business, self-managed super fund, a not-for-profit or even a large sporting club, you may be a director, which means you’ll need a director ID.
“There’s a common myth floating around that if you’ve got a registered tax agent, they can just apply for a director ID on your behalf, but that’s not true.”
“All company directors must apply for it themselves, as they are required to verify their identity themselves. This robust identification process will help prevent the use of false and fraudulent director identities.”
