Our November 2021 monthly edition of Tax News contains information on a number of recent developments, including:
- Preparing for the new Director ID regime
- Varying PAYG installments due to COVID-19
- Permanent changes to AGMs and electronic communications
- AUSTRAC transaction report information data-matching program
- Government payments data-matching program
Preparing for the new Director ID regime
As part of its Digital Business Plan, the Government announced the full implementation of the ‘Modernising Business Registers’ program.
This included recently enacted legislation introducing the new director identification number (‘director ID’) regime.
The director ID is a unique identifier that a director will need to apply for once and will keep forever.
The introduction of director IDs is intended to create a fairer business environment by helping prevent the use of false and fraudulent director identities, which “will go a long way to better identifying and eliminating director involvement in unlawful activity”.
Note that all directors will need to apply for a director ID, including directors of corporate trustees of self-managed super funds (‘SMSFs’) and of family trusts.
Individuals will be able to apply for a director ID from 1 November 2021 on the new Australian Business Registry Services (‘ABRS’) website (at abrs.gov.au) and will need to log in using the myGovID app (set to a ‘Standard’ or ‘Strong’ identity strength).
When an individual must apply for a director ID depends on the date they became a director. For directors under the Corporations Act:
- who became a director on or before 31 October 2021, they must apply for a director ID by 30 November 2022;
- who become a director between 1 November 2021 and 4 April 2022, they must apply for a director ID within 28 days of appointment; and
- who become a director from 5 April 2022, they must apply for a director ID before their appointment.
Individuals will need to apply for their director ID themselves to verify their identity (i.e., no one can apply for it on their behalf, including agents).
Varying PAYG installments due to COVID-19
Taxpayers can vary their pay as you go (‘PAYG’) installments throughout the year if they think they will pay too much, compared with their estimated tax for the year.
To assist taxpayers who continue to be affected by COVID-19, the ATO has stated that it will not apply penalties or interest on varied installments for the 2021/22 income year for excessive variations when the taxpayer has taken reasonable care to estimate its end of year tax.
The ATO says this means making a reasonable and genuine attempt to determine the tax liability. When considering if a genuine attempt has been made, the ATO takes into account what a reasonable person would have done in the same circumstances.
Note that variations do not carry over into the new income year.
Therefore, if a taxpayer made variations in the 2020/21 income year, they may need to vary again in 2021/22. The varied amount or rate will apply for all of the remaining installments for the income year, or until the taxpayer makes another variation.
The ATO encourages taxpayers to review their tax position regularly and vary their PAYG installments as their situation changes.
If a taxpayer realises they have made a mistake working out their PAYG installment, they can correct it by lodging a revised activity statement or varying a subsequent installment.
If a taxpayer is unable to pay an installment amount, they should still lodge their installment notice and discuss a payment arrangement with the ATO to ensure they will not have debt at the end of the year.
Permanent changes to AGMs and electronic communications
The Government has introduced into Parliament a Bill to permanently allow companies to use technology to meet their regulatory requirements, and ensure that companies can continue to meet their obligations amid the uncertainty of the COVID‑19 pandemic.
These reforms build on the recently renewed temporary relief, which we reported in September 2021, and which will remain in place until 31 March 2022.
Specifically, the new permanent reforms will:
- ensure that meetings can be held physically, as a hybrid, or (if expressly permitted by the entity’s constitution) virtually, provided that members, as a whole, are given reasonable opportunity to participate in the meeting;
- ensure that companies (and registered schemes) can meet their obligations to send documents in hardcopy or softcopy, and give members the flexibility to receive documents in their preferred format; and
- allow documents, including deeds, to be validly executed in technology-neutral and flexible manners, including by company agents.
AUSTRAC transaction report information data-matching program
The ATO will acquire transaction report information data from AUSTRAC for the period of 17 June 2021 through to 30 June 2027.
The data elements made available to the ATO will depend on what is captured in the reporting process and can include identifying information of customers and institutions facilitating transactions, identifiers such as ABNs, ACNs, and Australian Financial Services Licence details, and transaction details (including transaction type, accounts, instruments, amounts, and currency).
The ATO estimates that records relating to approximately nine million individuals will be obtained each financial year.
The data will be acquired and matched to ATO data to support the administration and enforcement of tax and superannuation laws, including registration, lodgment, reporting, and payment responsibilities.
Government payments data-matching program
The ATO will acquire government payments data from government entities who administer government programs for 2017/18 to 2022/23 financial years.
The data items include:
- service provider identification details (names, addresses, phone numbers, email, dates of birth, service type, ABN, ACN); and
- payment details (service provider ID, name of service, type of service linked to program, value of payments received for the financial year, count and type of claim, withholding, and re-credit amount).
The ATO estimates that records relating to approximately 36,000 service providers will be obtained each financial year (including approximately 11,000 individuals each financial year).
Should you require further information on any of the topics covered please contact us on 03 8419 9800.
This content has been prepared by Wilson Pateras to further our commitment to proactive services and advice for our clients, by providing current information and events. Any advice is of a general nature only and does not take into account your personal objectives or financial situation. Before making any decision, you should consider your particular circumstances and whether the information is suitable to your needs including by seeking professional advice. You should also read any relevant disclosure documents. Whilst every effort has been made to verify the accuracy of this information, Wilson Pateras, its officers, employees and agents disclaim all liability, to the extent permissible by law, for any error, inaccuracy in, or omission from, the information contained above including any loss or damage suffered by any person directly or indirectly through relying on this information. Liability limited by a scheme approved under Professional Standards Legislation, other than for the acts or omissions of financial services licensees.