Director ID: ATO confirms crackdown on those “deliberately” missing obligations

As company directors scramble to file their Director ID applications ahead of December 14, the Australian Taxation Office (ATO) says it will consider penalties for business leaders who “deliberately” sidestep the new identification system.

The application window for the compulsory Director ID system, which provides business leaders with a unique 15-digit number identifying their corporate activities, officially closed on November 30.

Under the Corporations Act 2001, the maximum criminal penalty for company directors who go without a Director ID Number (DIN) is $13,200, with maximum civil penalties ballooning out to $1.1 million.

However, a lack of awareness among the broader business community, error codes from the related myGovID system, and a blowout in customer assistance wait times meant some 700,000 of Australia’s 2.5 million company directors were yet to sign up by the end of the month.

With thousands of company directors technically committing a criminal offence on deadline day, the ATO and Australian Business Registry Services (ABRS) last week confirmed it would not seek penalties against directors who apply by next Wednesday.

Given the ATO’s pledge to take a “reasonable approach” to late applicants, corporate compliance experts said it was likely the ATO would only seek penalties against those who deliberately flout the rules, or those who breach other laws while going without a DIN.

The ATO appeared to confirm that approach on Tuesday afternoon.

“We are taking a reasonable approach to those who are trying to do the right thing,” the ATO said in a statement.

“We will not take compliance action on late applications received before 14 December 2022.

“After this date, however, penalties may apply for directors who are deliberately not meeting their obligations.”

Applicants urged to give myGovID another go for Director ID system

While the ATO says it intends to chase the most egregious offenders, an enormous proportion of Australian company directors are still running the risk of missing the 14-day grace period.

An ATO spokesperson confirmed to SmartCompany that more than 1.9 million Director IDs had been issued as of December 5, suggesting as many as 600,000 are yet to file their application.

Some company directors say the main hurdle between them and a DIN is the separate myGovID system.

Before applying for a DIN, business leaders must first create a myGovID — a process that matches at least two standard forms of identification, like a passport, driver’s license, or birth certificate, against documents already contained in government records.

However, applicants who have legally changed their name, or whose titles appear differently across forms of government ID, say they have faced myGovID errors.

Users facing myGovID errors can access troubleshooting information via the myGovID website, and the ATO is now urging directors who previously faced difficulties with the process to give their applications another go.

“This is a great time for directors to set aside some time to apply and get the support they need,” an ATO spokesperson said.

“We encourage directors not to wait but to apply now, so they can avoid a last-minute rush and have their application done and dusted well ahead of 14 December.”

Director ID phone applications available

Applicants who are still unable to sign up to myGovID can apply for a DIN via phone at 13 62 50.

While many directors complained of extensive wait times as the November 30 deadline approached, the ATO spokesperson said its call centres have seen wait times “significantly decrease” in recent days.

“Over the past 3 days, the average wait time for phone support has been 6 minutes,” they said.

That said, phone applications still require significant information from the applicant.

Callers must provide their residential address, as held by the ATO, plus a primary and secondary Australian identity document — for example, a birth certificate and a driver’s license.

In addition, callers must provide “information from two other documents to answer questions we know about you”, the ABRS says.

This can include bank account details, notices of assessment, super account details, dividend statements, Centrelink payment summaries, or PAYG payment summaries.

Paper applications for Director ID

For those who cannot sign up via phone — and directors of Australian companies who reside overseas — postal applications are available.

Directors located in Australia must call the ABRS to request a paper form. Those residing overseas can access the paperwork on the ABRS website. 

In addition, directors chasing a paper application must provide certified copies of their ID.

“Do not send original documents as these will not be returned to you,” the ABRS noted.

For directors based overseas, there is now precious little time to certify documents and mail them to Australia before the December 14 cut-off.

Once received, those paper applications could take as long as 56 days to process, the ATO said.

Noting the difficulties some directors overseas may face when certifying their documents, there is one final stopgap: a paper form requesting a last-ditch extension.