The rush for company directors to apply for a director identification number (director ID) by the middle of this week will likely lead to an extension being put in place, according to an SMSF specialist.
SMSF Alliance principal David Busoli said company directors, including directors of a corporate SMSF trustee, who miss the 30 November deadline to apply for a director ID may face a maximum criminal penalty of $13,200 or up to $1.1 million under civil law.
“Given the large percentage of the director population that will have failed to comply, the [ATO agency] Australian Business Registry Services have a problem,” Busoli said, referring to recent comments from ABRS that at 23 November 1 million directors still had to apply for a director ID.
“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.
“In any case, directors who have failed to apply in time will be given the opportunity to explain why. That said, applying now will save a whole lot of unnecessary additional work so please keep the pressure on your tardy director clients.”
The ABRS is allowing directors to request an extension to 31 January 2023 to apply for a director ID via its website.
The site, which was updated on 28 November, stated a request for an extension could only be made where someone was unable to apply due to system unavailability or had been unable to contact ABRS by phone.
Busoli said the reason for the late rush for applications and the possibility that some may miss the deadline was a mix of technology and motivation.
“Undoubtedly, one of the reasons for this shortfall has been the digital process and the inability for this to be outsourced,” he said.
“Recognising this, in the last couple of weeks paper forms have been resurrected and mailed to errant directors.
“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,” he said, reflecting comments made by the ABRS that it was receiving high numbers of applications each day, including a record 28,426 applications in a single day.
