Corporations Act Directors ID, Superannuation, and Small Business Depreciation Pool Balances.
Corporations Act Directors ID
All directors of a company (including a corporate trustee), registered Australian body, registered foreign company or Aboriginal and Torres Strait Islander corporation will need a director ID in order to fulfil the requirements of a director into the future.
When you must apply depends on when you were appointed as a director:
Existing directors have until 30 November 2022 to apply.
Directors appointed between 1 November 2021 and 4 April 2022 must apply within 28 days of their appointment.
From 5 April 2022, intending directors must apply before being appointed.
The new Australian Business Registry Services (ABRS) is responsible for administering the director ID initiative. ASIC is responsible for enforcing director ID offences set out in the Corporations Act 2001. It is a criminal offence if you do not apply on time.
For more details and to apply online see the link: Visit the ABRS website for more information about director ID. You will need a myGovID (this is different to your myGov) to apply. If you need assistance, our office is available to help you through the process.
Superannuation Will Now Follow Workers Between Jobs
Superannuation funds will now be “stapled” to Australian workers – following them when they switch jobs. This will minimise unintended multiple accounts that have been occurring under the existing system.
One of the problems that employers have had under the current system is getting the superannuation fund information from their employees. If the employee superfund information is incorrect, the payment bounces back to the employer after a couple of weeks and this results in SGL surcharge and additional administration and costs for the employer. As part of the federal government’s “Your Future, Your Super” reform package, workers will have a single super account automatically following them between jobs from November 1.
The nature of mandated superannuation has allowed for widespread consumer disengagement and mission creep from funds. Superannuation minister Jane Hume said the government had focussed on eliminating multiple accounts that cause exit fees and multiple administrative fees, and insurance premiums. One of the benefits of a “stapled” superannuation account is that it reduces multiple superfund accounts for employees.
One of the problems with how people view superannuation is that millions of Australians “set and forget” their super – especially if they are years away from retirement. It is important that employees choose superfunds that have a healthy return. With this in view, the federal government has also launched the free YourSuper comparison tool. The intention of this tool is to allow workers a method of easy comparison of their existing superfund with other available superfunds so that they can be informed as to low cost and high performing funds that may meet their needs better.
For employers however, the “Choice of Super” form still needs to be given to the employee at commencement of the employment. If the employer does not receive it back from the employer, they can make a request to the ATO on the “stapled” superannuation account. This will then give them the appropriate information required to pay into the employees superfund account via the clearing house that they choose to use. If you wish us to make the request on your behalf, we are fine to do that.
Small Business Depreciation Pool Balances
With the new rules in play now for depreciation for Small Business Entities (SBE), a lot of people will notice that their SBE depreciation balances in the 2021 tax year have been completely written off to nil. Whilst this was good news for the 2021 financial year (because they had a large deduction for that year), it has meant that clients will no longer have the buffer of a depreciation pool which contributes to their deductions each year.
Under the temporary full expensing rules for depreciation, any asset purchased up until the 30th June 2022 (and probably 2023 if the budget measures are legislated) will be eligible to fully deducted in the year of purchase. This is the case regardless of the cost. To be eligible for the deduction in the current year, you must have the asset ready for use in the business before the 30th June 2022. We have noticed a strong trend of clients purchasing assets and having to wait a significant number of months before delivery can be taken. This is because there is a national shortage on a lot of machinery and vehicles which doesn’t look like easing any time soon. A classic example of this is a minimum 9 month wait on a brand new Dual Cab Landcruiser.
As a result, the second hand market has exploded with prices being compared to near new prices with the lure of the asset being immediately available with no wait time. So if you are looking at buying that new tractor or vehicle before 30th June 2022 as a part of your tax planning, it might be wise to start looking around now to ensure you can take delivery of the asset before 30th June 2022 to ensure it can be fully deductible in the current year. Looking around in April or May this year might lead to disappointment.