Month: December 2021

Single Touch Payroll (STP) is the process by which taxation and superannuation information is sent directly from STP-enabled software to the ATO. Every time you file a pay run to the ATO to pay your employees, that information is then transmitted to the ATO in real time.

The first phase of STP, “STP1” has been successful in the rollout across the country and has provided a number of benefits to employees and employers in streamlining the flow of information necessary for completion of tax reporting obligations.

Information collected by STP2-enabled software will flow directly to Services Australia, enabling them to streamline their services.

Initially intended to commence on 1 July 2020 the start date was pushed back to 1 January 2022 and, while 1 January 2022 remains the mandatory start date, employers who start using STP on or before 1 March 2022 will be considered by the ATO to be reporting on time.

In addition to the 1 March 2022 deadline, DSPs can apply for a deferral to enable them to complete software development and roll it out to their clients. DSPs will advise their clients if they have a deferral and when clients can start to reporting through STP2.

The ATO will not penalise genuine mistakes for the first year of STP2 reporting until 31 December 2022.

Where employers need extra time to prepare, beyond whatever deferral has been granted to their DSP, those employers or their registered tax or BAS agents will be able to apply for a further delay in transition. Details and applications for those employer deferrals are expected to be available on the ATO’s website from early December 2021.

Additionally, employers in particular circumstances will be able to apply for exemptions from the STP system. For example, employers with a withholding payer number (WPN) are exempt from STP reporting for all financial years from 2018–19 to 2021–22. Those employers will need to start reporting these payments through STP from 1 July 2022.

Employers will need to make sure they are ready for STP2 before March 2022 unless a deferral is granted, it will only be employers in very exceptional circumstances which may be overlooked for the purpose of registering for STP2, such as having poor or no internet access.

If you are unsure as to whether you are ready for STP2 or require further information, please contact MDC.

https://www.ato.gov.au/business/single-touch-payroll/

CPA – STP Phase 2 Webinar

Based on the recent ATO announcement, the Australian Business Registry Services (ABRS) will be introducing and maintaining the Director Identification Number as of 1 November 2021.

What is a Director Identification Number?

The Director Identification Number (Director ID) is a 15 digit unique identifier that will help prevent the use of false or fraudulent director identities with the new registry services of the ABRS. This will make it easier to trace director relationships across companies and help identify and eliminate involvement in illegal activity such as illegal phoenix activity.

Why do you need a Director Identification Number?

Shareholders, employees, creditors, consumers, external administrators and regulators are entitled to know the names and specific details of the directors of a company.

All directors are required by law to verify their identity before receiving a director ID. This is important because it will help to:

• prevent the use of false or fraudulent director identities;
• make it easier for external administrators and regulators to trace directors’ relationships with companies over time;
• identify and eliminate director involvement in unlawful activity, such as illegal phoenix activity.

Who needs to apply for a Director ID?

• Company directors appointed under the Corporations Act
• Company directors appointed under the Corporations Aboriginal and Torres Straight Islander Act
• Member of an SMSF for which there is a corporate trustee
• Directors of a family trust
• Directors acting in the capacity of an alternative director (even if appointed for a specified period or on a temporary basis)

Who doesn’t needs to apply for a Director ID?

• director of an incorporated association (with no ABRN) registered with the Australian Charities and Not-for-profits Commission (ACNC);
• company secretary but not a director;
• acting as an external administrator of a company; or
• run your business as a sole trader or partnership.

What you need to do as of 1 November 2021?

Individuals who are currently a director or will be acting as a director in the future must apply for a Director ID based on the transitional arrangements specified in the table below:

How do individuals apply online for a Director ID?

1. Go to the ABRS website to access the ABRS Director ID service and learn about the Director ID requirements
2. Verify your identity using your myGovID credentials or create a myGovID using your smartphone and Australian identity documents. For more information visit How to set up myGovID.
3. Conduct a proof of record ownership by answering two questions about the individual’s ATO record. See below for further information.
4. Complete a Director ID application on the ABRS platform to receive the Director ID instantly.

Director ID Letter