The ATO will be focusing on directors, including those of corporate SMSF trustees, who are still yet to obtain a director identification number (director ID) as a compliance priority in the 2024 financial year.
ASF Audits head of education Shelley Banton urged SMSF advisers to remind their clients to apply for a director ID if they had not already done so, as the criminal and civil penalties for failing to obtain one can be severe.
“Apparently there is still about 100,000 directors of corporate SMSF trustees who don’t have a director ID and that was reported by the ATO back in February,” Banton told attendees during a recent ASF Audits webinar.
“What we have been told is that ASIC will enforce penalties for failing to apply for an ID and failing to hold an ID, and those fines are worth up to $1.3 million.
“Now there’s been no SMSF directors caught in this net as yet and that may be because they have realised there is a little bit of an age cohort in there.
“If you have any clients in this bucket, please once again reach out to them and make them aware of the responsibility to get a director ID because it is going to catch up with them sooner or later.”
She added corporate trustees may have had issues in the past in applying for a director ID as the process could only be completed digitally.
“It would be interesting to undertake a demographic analysis of those outstanding directors who haven’t applied for [a director ID] because as we know there’s a lot of technologically challenged trustees out there who will never be able to get their heads around applying for a director ID,” she said
“So, I don’t think we’re going to see that 100,000 number go down to zero in the very near future.”
Existing directors of a corporate trustee were required to have applied for a director ID by 14 December 2022 and a further extension to 31 January 2023 was granted for those who could not navigate the online application process.
New trustees must apply for a director ID before they are appointed and all applications must be made online using a myGovID through the Australian Business Registry Services website.