THP are proud to have been listed for the 2nd year running on the Financial Review Top 100 Accounting Firms list for 2022 thanks to @FinancialReview. Thank you to our incredible clients for helping us achieve such fantastic results.

DIRECTOR IDENTIFICATION NUMBER (DIN) - TIME IS RUNNING OUT TO APPLY FOR A DIRECTOR ID

The ATO has reminded directors that they need to apply for a director ID by 30 November 2022. The ATO said the fastest way to apply is online. Directors can streamline their online application by setting up their myGovID with a Strong identity strength. This means they'll only need to provide either their TFN or residential address, as held by the ATO, at the proof of record ownership step. However, the ATO said that if they can't set up their myGovID to a Standard or Strong identity strength, there are other ways to apply.

For further information regarding this, please click here.

Once you receive your director ID, you need to pass it onto the record-holder of the corporate trustee, which may be the company secretary, another director, a contact person or an authorised agent of the company. If the corporate trustee changes or you become the director of another company, you will need to pass on this information to the new corporate trustee or the other company. 

Failure to do so may result in substantial fines for the director enforced by Australian Securities and Investment Commission (ASIC).

Can directors apply for an extension? 

If directors are unable to apply for their Director ID before the 30 November 2022 deadline, there is an extension form available on the ABRS website. 

add thp to your email contacts

As of June 2022, we've changed the way that you receive ATO notices from us. You will receive an email and a text message. The text message will have a code to open the link within the email. Please add the following email address to your contacts to ensure these emails don't go to your junk inbox: thppost@thpartners.com.au 

This new system will allow us to deliver ATO correspondence to you digitally and most importantly securely, but because it looks different, we wanted to give you a heads up that it is not a scam!

Please make sure you let us know if you have a new mobile number so we can update our records.

Lodging your tax return late is about to cost you more

Taxpayers lodging their annual return and business activity statements late to the ATO are about to face tougher fines, with a 35 per cent increase locked in by the middle of 2023.

An increase to federal government penalty units included in last month’s budget is set to increase fines for late returns, activity statements, fringe benefits and single-touch payroll reports and annual GST returns.

Treasurer Jim Chalmers announced the increase in penalty units, used to calculate fine amounts, from $222 to $275 from January 1 next year. Penalty units are used for fines related to communication, financial, tax and fraud offences.

The amount will continue to be indexed every three years in line with the consumer price index, with the next hike due on July 1, 2023. Increases are designed to deter unlawful behaviour and contribute to the budget bottom line.

Budget papers showed the increase would increase revenue by $31.6 million over four years.

The Tax Institute’s general manager for tax policy and advocacy, Scott Treatt, said practitioners and their clients should pay close attention to lodgment deadlines as fines increase by more than 35 per cent.

In line with inflation, the increase comes amid increases to the cost of living and pressure on Australian households.

“The high inflation environment of the past three years means the legislated indexing could see penalties for late lodgement spike by over 35 per cent from the current level, to over $300 per penalty unit.

“That’s a significant increase, which will come into effect from July 1, 2023, just six months after this latest increase.“

For tax purposes, penalty units are used for fines where taxpayers fail to lodge their required data. Automated failure to lodge penalties may be applied to late-lodged returns, reports and statements.

“In some cases, such as criminal activity and the deliberate avoidance of tax obligations, steep penalties may be appropriate,” Mr Treatt said.

“For taxpayers who simply lodge a little late, it’s a significant cost. The Commissioner retains and exercises the power to waive penalties in certain cases.

“For taxpayers that means understanding their rights and the process to appeal a penalty. For those without a tax agent, this can be very tricky.

“We’re cautioning taxpayers and tax practitioners; they need to be more vigilant in keeping their tax obligations up to date to avoid the risk of these increased penalties.”