The ATO has confirmed education and not enforcement will be its primary focus during the transition period of the new director identification number regime for instances of non-compliance.
“Throughout the transition period for the director ID [system], the ABRS (Australian Business Registry Service) will assist directors to understand their obligations and support them to apply,” ATO SMSF industrial liaison, policy and governance senior director Martin Frauenfelder noted.
“During 2022 we will have contact with newly appointed directors to discuss their registration requirements and provide guidance on how they can apply. We will work with directors who don’t apply in time to notify and support them where we can.”
However, Frauenfelder pointed out even with making education its focus, more severe action will be taken in situations where repeated non-compliance with the new rules has been identified.
“If we do find there is persistent non-compliance, we do have provision under the legislation to take firmer action if necessary, which may include making referrals to ASIC (Australian Securities and Investments Commission) [to have it] conduct enforcement activities,” he revealed.
“However, I do want to stress our aim during this transitional period is to help people get on board with these new requirements.”
While he said the ATO did not have any data as to how many SMSF trustees had applied for a director ID to date, he confirmed the framework in place has been processing the overall number of applications in an efficient manner.
“We’ve actually managed over 126,000 applications in November alone and around 96 per cent of all of those applications to date have been completed online,” he noted.
SMSF Association technical manager Mary Simmons encouraged the sector not to allow the new requirement to have an adverse effect on it.
“With over 60 per cent of the SMSF population set up with a corporate trustee, it is important to not let this new regime discourage individuals from setting up corporate trustees,” Simmons said.