The ATO will introduce an extra verification measure to its online services platform in order to combat increasing risks of fraud and identity theft, resulting in an additional compliance obligation for SMSF trustees when appointing new agents or modifying existing agent authorisations.
Under the change, the regulator will extend its client-to-agent linking protocols to entities with an Australian business number (ABN), including SMSFs, from 13 November.
Under the extended protocols, trustees must use the new Agent Nominations feature on the ATO online services for business webpage when making changes to their agents or appointing new ones, in addition to meeting the security protocols for their MyGovID.
SMSF Association head of technical Mary Simmons noted the change is unlikely to affect trustees who do not need to make any adjustments to their existing agent nominations.
“While this update is rooted in a strategy to curb fraud, it is our understanding that for the majority of existing SMSF trustees, the daily operation of their fund remains unaffected. This change only impacts SMSFs seeking to nominate a new agent or make changes to existing agent authorisations,” Simmons said.
“For SMSFs that do not require a change to their authorised agent or a change to the authorisations given to an existing agent, the transition will be seamless; there is no need for action or concern. This ensures that stability is maintained for the overwhelming majority of funds, who can continue to rely on established client-to-agent links and authorisations.”
She pointed out trustees looking to establish a new SMSF and register their ABN or tax file number should face no difficulties with the new verification process as it is relatively straightforward, however, for SMSFs with a corporate trustee, the procedure becomes more intricate.
“It is immediately apparent that if SMSFs with a corporate trustee need to use the online service to nominate an agent or change agent authorisations, they will need manual intervention by the ATO. The primary director of the corporate trustee will need to contact the ATO to receive step-by-step guidance on linking their MyGovID to the SMSF’s ABN,” she said.
She noted SMSF trustees would be wary about further online security changes given the difficulties some faced when attempting to set up a MyGovID account to register for a director identification number in 2022.
As such, she recommended trustees ensure their fund details were up to date, as well as avoid last-minute agent changes close to the dates for the lodgement of annual returns and transfer balance account reports.