The Tax Office could fine a million Australians $13,000 in a WEEK due to a little-known law
- Australians who head a business, organization or community group face fines
- The ATO is enforcing a law that requires directors to have identification by November 30.
- Those who do not have a director ID by the deadline risk a fine of up to $13,200
More than a million Australians face fines of up to $13,000 from the Australian Taxation Office as a new law comes into force within a week.
The ATO requires heads of companies, small businesses, non-profit organizations, charities, community groups and corporate trustees to have a director identification number (Director ID) by November 30.
Those who do not apply for a director ID by the deadline could risk a fine of up to $13,200 under a recent change to the Companies Act.
Australians running a company, small business or organization must register a director’s ID by next Wednesday or risk a large fine (file image)
About 1.4 million Australians have applied for a director ID, a unique 15-digit identifier for all registered companies, organizations and bodies, so far, according to an ATO statement.
But this is out of the 2.5 million directors nationwide, which means there are still about 1.1 million directors who still don’t have an ID and are at risk of being fined.
Law enforcement will use Director IDs to help track down those acting fraudulently or deceptively.
This includes tracking entities where a ‘dummy manager’ appears. Fake directors can be friends, relatives, or associates of the real director.
Identifications have also been enforced to stop ‘phoenixing’, which is when a company transfers assets to a new entity and then liquidates or abandons the old company to avoid paying debts to creditors.
The ATO will enforce the law next Wednesday in a bid to crack down on heads of companies and organizations committing fraudulent activities (file image)
As the ATO deadline approaches, so does the number of director registrations, with the ATO revealing a whopping 28,426 directors who applied on Monday alone.
Australian Business Registration Services Under Secretary Karen Foat has warned directors not to miss next week’s deadline and register immediately.
‘Some people may not realize that they are directors of a company. You don’t have to wear a suit or work in an office to be considered a director,” he said.
“If you run a small business, a self-managed superfund, a nonprofit or even a large sports club, you may be a director, which means you’ll need a director ID.”
Registering a director ID is free and only requires proof of identification. Most directors use your bank account details or an ATO notice of assessment.
You can apply for a Director ID on the Australian Business Registration Services website.
Sole traders and contractors are excluded from the need for a director ID.