GST obligations to be included under the director penalty regime
The strengthening of the director penalty regime has seen director penalty notices (DPNs) extended to superannuation guarantee obligations from 1 March 2019.
Now it looks like DPNs for GST are set to take affect from 1 October 2019 on the back of recent legislation, Treasury Laws Amendment (Combating Illegal Phoenixing) Bill 2019, which lapsed at the dissolution of Parliament in the lead up to the last federal election, but has just been revived.
Schedule 3 to the bill allows the Commissioner to collect estimates of anticipated GST liabilities and make company directors personally liable for their company’s GST liabilities in certain circumstances. This also applies to LCT and WET as these taxes are jointly administered with the GST.
The estimates regime (Division 268 in Schedule 1 to the TAA 1953) enables the Commissioner to estimate unpaid amounts and to recover the amount of those estimates from taxpayers. The new legislation extends this regime to include GST.
As well as directors possibly facing personal liability, the options available to the ATO under its director penalty regime includes garnishee proceedings to recover amounts owed, offsetting amounts owed against any other tax credits, and initiating legal recovery proceedings. Before any of such actions are taken, the ATO is obliged to issue a “director penalty notice” outlining the unpaid amounts and remission options open to the concerned directors.
Once the bill is passed, from 1 October 2019 the ATO will be able to issue notices of estimated net amounts of GST to businesses that have not lodged a return. The estimation will then be due at the GST lodgement due date unless this is over-ridden by an actual GST amount through the lodgement of the overdue return. Estimates may be reduced if sworn statements are provided, although there may be some discretion in this area.
As with the other categories of director penalties, the penalty arises when the director’s obligation is unsatisfied on the due date, in this case, the day the company is required to pay the assessed net amount or GST instalment. The legislation also adds an ability for the ATO to retain tax refunds if a return is not lodged or other relevant information is not provided.
AUSkey to be decommissioned
Many if not most taxpayers have known about and been dealing through the government’s myGov authenticated access portal for some time now. However from the end of the first quarter of next year, businesses will need to get used to a new way to access and send business information to the government online — something that is achieved through AUSkey at the moment.
The new service is to be called myGovID, thus aligning this service with the existing myGov credential service. It will to be a secure login that identifies an individual operating on behalf of a business when using government online services.
The whole-of-government identity solution has been developed in order to overcome the mobility and access limitations of AUSkey, which has been found to be:
- not supported on mobile devices
- not compatible with all internet browsers
- difficult to setup and maintain
- restricted to online services and authorisations and do not carry across channels (that is, cannot be used to verify with the ATO by phone)
- unable to provide a password reset functionality, forcing users to re-register when a password is forgotten
- difficult for users who manage multiple AUSkeys.
myGovID is to be launched in conjunction with a new authorisation service RAM (Relationship Authorisation Manager) that allows users to link myGovID to an ABN and manage who is authorised to act on a business’s behalf.
To support the transition from AUSkey, RAM is now connected to Access Manager. This means when a user authorises a person to act for a business using RAM, they can set their permissions for ATO online services in Access Manager at the same time.
The ATO says the solution will deliver a high level of confidence in the accuracy of the client’s identity through biometric matching to documents issued by trusted Australian third parties (such as driver’s licences and passports). The credential is a device based authenticator app, paired with native authentication (such as a fingerprint) or password.
myGovID is being developed as a whole-of-government digital identity solution, which will overcome the mobility and access limitations of AUSkey. It will be made available as a free downloadable app so holders will be able to securely access government services anytime, anywhere and on any device.
AUSkey will continue to be supported during the transition to myGovID, however it is envisaged that AUSkey should be able to be decommissioned by March 2020. In the meantime, business owners may want to take some initial steps. To prepare for the change, they can:
- check their Australian business number (ABN) details are up-to-date in the Australian Business Register (ABR) — this ensures the right people can act on behalf of the business
- if they have an Administrator AUSkey, check if other nominated AUSkey users are still correct.
For more information or if you have any questions, the ATO has set up a dedicated email address: DPO@ato.gov.au
Taken goods for private use? Here’s the latest values
The ATO knows that many business owners naturally help themselves to their trading stock and use it for their own purposes. This common practice can occur in businesses such as butchers, bakers, corner stores, cafes and more.
The ATO regularly issues guidance for business owners on the value it expects will be allocated to goods taken from trading stock for private use. The table below shows these values for the 2018-19 income year, taken from Taxation Determination TD 2019/2.
|Type of business||Amount (excluding GST) for adult/child over 16 years||Amount (excluding GST) for child 4-16
|Takeaway food shop||$3,430||$1,715|
|Mixed business (includes milk bar, general store and convenience store)||$4,260||$2,130|
The basis for determining values is the latest Household Expenditure Survey results issued by the Australian Bureau of Statistics, adjusted for CPI movements for each category.
Note that the ATO recognises that greater or lesser values may be appropriate in particular cases, and where you are able to provide evidence of a lower value, this should be used.
Payment factors for market linked income streams
The following table shows the payment factors (PF) for income support recipients according to the product’s remaining term at purchase, or on 1 July each year.
|70 or more||26.00||50||23.46||30||18.39||10||8.32|