Hundreds of hundreds of individuals might face hefty penalties for failing to fulfill strict new director guidelines launched this yr by the Australian Taxation Office (ATO).
Anyone who has been appointed because the director of an organization or thought-about an “eligible officer” was required to use for a director ID with the ATO by Wednesday or danger a wonderful of as much as $13,200.
The new system was carried out earlier this yr because the tax workplace scrutinises “phoenixing” – the place a brand new firm rises from the ashes of one other in a observe that prices the Australian financial system billions of {dollars} yearly.
“Having a director ID will help prevent the use of false or fraudulent director identities and identify and help eliminate director involvement in unlawful activity, such as illegal phoenix activity,” a press release on the ATO web site stated.
Directors who have been appointed to their posts earlier than November 2021 initially had till November 30 to submit an software for director ID, however the deadline was prolonged by two weeks to December 14, with the ATO saying it wished to take a “reasonable approach to those directors who try to do the right thing”.
Those appointed between November 1 and April 4 needed to apply inside 28 days of their appointment, whereas from April 5, administrators have needed to file for the ID earlier than their appointment to the function.
The ATO warned it was a felony offence if administrators didn’t apply on time, and ASIC would implement offences from the Corporations Act 2001, together with a wonderful of as much as $13,200 for failing to have a director ID when required to take action.
Those discovered with a number of IDs might face a $26,640 wonderful and a one-year jail sentence, with the identical penalty for “misrepresenting” the director ID.
Fines might soar as excessive as $1.1m for people if they’re pursued in a civil swimsuit.
An estimated 700,000 firm administrators had not utilized for ID in time to fulfill the preliminary November 30 deadline, the ATO revealed on the finish of final month.
