Must-Know ATO Updates For Every Accountant
- Ready, set, go on Director Identification Numbers
- ATO Gears up for GST recoveries from Directors
- The Window of Opportunity in dealing with a sympathetic ATO
New Directors Must Have a Director Identification Number from 1 November 2021
As part of the 2020 Budget Digital Business Plan, the government announced that the ATO would be responsible for the full implementation of the Modernising Business Registers (MBR) program. The MBR includes a number of initiatives, one of which is the Director Identification Number (‘DIN’) program.
The DIN program has been instigated as part of the ATO’s attempts to combat phoenix activity. More can be read about this issue in our earlier article here.
What is a DIN?
A DIN is a unique 15-digit identifier for each person who consents to being a director if their organisation is a company, registered foreign company, registered Australian body or Aboriginal and Torres Strait Islander corporation. The person will keep that unique identifier permanently, even if they cease to be a director.
By obtaining a DIN, directors are protected from being unknowingly appointed to a company for nefarious purposes.
When do you need to have a DIN?
From November 2021, directors will need to verify their identity as part of a new director ID requirement. No one can apply on their behalf however accountants should consider passing this information on to all clients, ensuring they don’t miss the memo.
|Date you become a director||Date you must apply|
|On or before 31 October 2021||By 30 November 2022|
|Between 1 November 2021 and 4 April 2022||Within 28 days of appointment|
|From 5 April 2022||Before appointment|
Failure to get a DIN by the required due date may result in an infringement notice being issued and/or civil or criminal penalties being applied.
How do I get a DIN?
Applications for a DIN will be done via MyGov. During this process directors will need to upload two documents to verify their identity (eg/ bank account details or ATO Notice of Assessment) in addition to their TFN.
GST via Director Penalty Notices
Directors for some years have faced personal liability for unpaid PAYG and SGC obligations however as we alerted our readers to in our earlier posts, from 1 April 2020 the ATO’s DPN regime was extended to include unpaid GST obligations.
While the ATO have had the ability to render directors personally liable for GST since the legislation was introduced in 2020, due to the pandemic the ATO have held off from issuing DPN’s for GST related debts. This however, like much of the ATO’s debt collection activities during the pandemic, is about to change.
At a recent industry forum the ATO’s representative confirmed that it is ‘turning its mind’ to recoveries of corporate GST debts via the DPN process. This ‘sleeping debt’ may soon cause directors significant anxiety as they plan for their business’s recovery.
The window of opportunity in dealing with a sympathetic ATO
We encourage any accountants with clients who have a tax debt from either pre COVID19 times or as a consequence of COVID19 to start the conversation about what can be done to resolve these debts. From recent experience we have found the ATO to be quite sympathetic to taxpayers who are making a concerted effort to resolve their outstanding taxation obligations. Accommodations granted to date include extended repayment arrangements or where it is not possible to pay the full amount, by granting a compromise of the debt via one of the formal restructuring processes available.
Start the conversation by contacting us now to discuss how we can help your clients work through the myriad of options available to them. With our specialised knowledge in dealing with distressed debt situations we have the experience and networks available to us that mean we can help generate the right outcomes for your clients.
One thing is for certain: clients who move quickly to resolve their financial challenges will be much better placed for securing a successful outcome than those who delay. And who knows how long it will be until the window of opportunity of dealing with a sympathetic tax office slams shut!