DIRECTOR ID REGIME
Since the introduction of the Director ID regime in November 2021 we have written in this forum about the need for company directors to obtain a unique 15 digit identifier by the 30th of November 2022.
With the due date now just days away, we urge any directors who have not already done so, to apply for their ID as a matter of priority as failure to obtain a Director ID can result in significant monetary penalties.
Since we last wrote, draft Legislative Instrument ABRS 2022/D1 has been published to exempt persons who cease to be company directors prior to 30 November, having to obtain a Director ID.
In order to apply, directors need to have setup a MyGovID (not to be confused with a MyGov account).
Setting up a MyGovID involves downloading the official App onto a smart-phone and completing the identification procedures. This can usually be done quite easily with your driver licence and Medicare card.
Once you have a MyGovID, you can then proceed to apply for a Director ID here.
When applying for a Director ID, you will need to have your Tax File Number handy as well as some additional information to verify your identity.
This additional information can be any two of the following items:
- Bank account details;
- ATO Notice of Assessment;
- Superannuation account details;
- A recent dividend statement;
- Centrelink payment summary; and
- PAYG payment summary.
Once the application is submitted, you will be issued your unique 15 digit Director ID.
If we assist you to manage the ASIC compliance for your company, please advise us of your Director ID so that your ASIC corporate records can be updated.
And if you need assistance to apply for a Director ID, please get in touch at your earliest opportunity.
PERSONAL SERVICES INCOME & PERSONAL SERVICES BUSINESSES
On the 23rd of November, the ATO published Tax Ruling TR 2022/3 to update their guidance on the application of the Personal Services Income (PSI) rules.
Where the PSI rules apply, they operate to deny the taxation benefits that can be accessed by operating through a company, trust or partnership structure.
The new ruling explains the ATO’s current view on what constitutes Personal Services Income and when the PSI rules will apply.
Anyone who operates a business where the majority of the income generated is “mainly a reward for an individual’s personal efforts or skills”, needs to be across the application of the PSI rules.
If this is you, we encourage you to get in touch to discuss you situation.
SINGLE TOUCH PAYROLL (STP) PHASE 2
STP Phase 2 was announced in the 2019/20 Federal Budget and involves and expansion of the data that the ATO collects through the STP system.
This expanded data includes:
- Disaggregation of gross earnings into component parts (eg ordinary hours, overtime, etc);
- Employment and taxation conditions (eg TFN declaration information, employment basis, etc); and
- Child support garnishees and deductions.
STP Phase 2 officially started on the 1st of January 2022. However, there are extensions in place to adopt Phase 2 based on the payroll software provider used.
Below is a summary of the adoption dates applicable for some of the most common payroll software providers:
- Xero: 31 December 2022
- MYOB: 31 December 2022
- KeyPay: Live for STP Phase 2
- Quickbooks: Live for STP Phase 2
- Reckon: 31 December 2022
- Wage Easy: 31 December 2022
With the 31 December extended due date nearing, software packages like Xero and MYOB are well into the process of rolling out STP Phase 2.
In most instances, this involves users updating some payroll settings within the software and then opting in to start reporting under STP Phase 2.
If you use one of the software products that has a 31 December deadline, please take action now to make the transition to STP Phase 2.
If you require more information, or need help to transition, please contact us.
PAID FAMILY & DOMESTIC VIOLENCE LEAVE
New leave provisions will soon come into effect to give employees access to paid family and domestic violence leave as follows:
- Employees of employers with 15+ employees: From 1 February 2023; and
- Employees of employers with <15 employees: From 1 August 2023.
Under the new provisions, all employees (including casuals) will have access to 10 days of paid family & domestic violence leave in a 12 month period.
The leave will not be pro-rated for part-time and casual employees and will be available upfront. Ie not subject to periodic accrual.
Further information on how the new paid family and domestic violence leave will work can be found on the Fair Work Ombudsman’s website.
If you have any questions about the changes and what you need to do in your business, please get in touch.
TAX LAWS AMENDMENT (2022 MEASURES NO 4) BILL 2022
On the 23rd of November Tax Laws Amendment (2022 Measures No 4) Bill 2022 was introduced into the House of Representatives.
This Bill contains a number of measures, the most noteworthy of which are the enactment of the Technology Investment Boost and the Skills & Training Boost that were announced in the 2022-23 Federal Budget.
These measures will provide businesses with a bonus 20% tax deduction for eligible expenditure on technology adoption and training.
The measures will apply to expenditure incurred from 29 March 2022 and:
- 30 June 2024 for the skills & training boost; and
- 30 June 2023 for the technology investment boost.
Whilst the measures will apply to expenditure incurred in the 2022 financial year, the first claims will be made through the 2022-23 income tax return.
The Bill has been referred to the Economics Legislation Committee for inquiry and report by the 25th of January 2023.
We will keep you posted on the progress of the Bill through Parliament. In the meantime, please get in touch if you have any questions.
QUOTE OF THE MONTH
In the information age, we have virtually limitless access to information at the click of a button.
Whilst this access to information affords us truly amazing opportunities, it can be very overwhelming.
The author Alexandre Dumas wrote: “Learning does not make one learned: there are those who have knowledge and those who have understanding. The first requires memory and the second philosophy.”
Nearly 200 years later, this quote has more meaning and relevance to us than ever.
Whilst a good memory is undoubtedly important, the real skill is the ability to assimilate this abundant knowledge to gain a rich and deep understanding.
This understanding is the difference between simply knowing and possessing the ability to use knowledge in powerful and meaningful ways. This understanding is what drives innovation and progress.
With this in mind, the question becomes – what can we do today to build a richer and deeper understanding?
Sky Accountants Ballarat
Phone: 1300 328 855
Office Address: 902 Howitt Street, Wendouree, Victoria 3355, Australia
Postal Address: PO Box 2234, Bakery Hill, Victoria 3354
Sky Accountants Gisborne & Macedon Ranges
Phone: 03 97444522
Office Address: 45 Hamilton Street, Gisborne, Victoria 3437, Australia
Postal Address: PO Box 270 Gisborne Victoria 3437