Author: Glance Consultants

Avoiding delays when lodging your tax return this year could be quite challenging because of the ongoing pandemic.

Moreover, you can still lodge your tax return electronically until 31 October 31 or 15 May 2021 if you are using the service of a specialist tax accountant.

Before you start lodging your tax return, make sure you have everything covered to avoid delays. You should also make sure that you are aware of all the COVID-related deductions that you can claim.

On the flip side, take note that the ATO can sometimes delay the processing of your tax return, especially if you have old overdue tax returns to lodge.

The normal processing will only continue once you get your tax affairs up to date. If you want to save time, hiring a tax accountant is recommended when taking care of outstanding tax returns.

Tax Office

With the lifting of the lockdown restrictions, accountants are permitted to open their offices to accommodate their clients. However, with stringent social distancing guidelines still in effect, professional service firms do not have access to their offices.

Online Tax Return Service

If you’re taking precautionary measures and don’t have a way to see a qualified accountant in person, utilising an online tax return service would be a perfect alternative.

With an online tax return service, you can claim everything you are eligible for. We at Glance Consultants offer this valuable service.

When lodging your tax return this year, make sure to have a checklist of the necessary things that you need to do to avoid delays.

If you need further assistance, you can seek assistance from Glance Consultants to help you lodge your tax returns successfully. Our firm can provide a comprehensive checklist to cover your requirements.

Contact us on 03 9885 9793 or fill out our contact form to get in touch.

Background

The Director Identification Number (DIN) regime is coming.

The Treasury Laws Amendment (Registries Modernisation and Other Measures) Bill 2019 (Cth) (the Bill) was passed on 12 June 2020 and subsequently received Royal Assent on 22 June 2020.

The Bill, together with other legislative changes, is part of the Federal Government’s ‘Modernising Business Registers Program’ that is aimed at unifying the Australian Business Register and more than 30 other business registers that are administered by the Australian Securities and Investments Commission.

The introduction of the DIN regime is a central component of the Bill’s objective and is given effect through amending the Corporations Act 2001 (Cth) and the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth).

What to remember

• Directors will be required to have their identity verified and have a unique and permanent identifier issued to them.
  
• Companies will need to put processes in place to ensure that all existing directors apply for a DIN within the prescribed timeframe once the DIN regime is implemented.
  
• Once the DIN regime is implemented, companies will also need to ensure that director appointment processes include the necessary steps for new directors to apply for a DIN. Once the transitional period ends, this process will need to be undertaken prior to a director appointment.

The DIN regime

The DIN regime is part of the Federal Government’s wider objective of:

• tackling illegal phoenix activity;
  
• making company directors more traceable and accountable;
  
• streamlining business registers by providing a single-point of contact; and
  
• furthering the Government’s ‘Deregulation Agenda’ by creating an electronic system than is readily accessible to everyone.

The DIN regime will involve a one-time application that requires directors of private and public companies (including foreign-born or foreign domiciled directors) and alternate directors to have their identity verified and then be allocated a DIN as a unique and permanent identifier. A DIN will continue to apply to the director even if he or she leaves their position.

DINs will be recorded in a new database that will be administered and operated by a registrar from an existing Commonwealth body. The identity of that Commonwealth body is yet to be announced.

The regime will make it easier for the registrar to verify director identities and refuse/cancel a DIN where an individual’s identity is in question. The requirements for identity verification remain to be confirmed, but will be contained in data standards made be the relevant registrar.

Additionally, the regime will also aid regulators and external administrators by establishing a transparent system that will in turn create a more timely and cost-effective process when investigating and commencing proceedings against directors.

When does a DIN need to be obtained?

The implementation date for the DIN regime has yet to be officially announced, with implementation to occur 2 years after the Bill received Royal Assent unless an earlier date is set. It is anticipated that the roll out will occur in the first half of 2021. However, commencement may well be later given the impacts of COVID-19.

Within the first 12 months following implementation, new directors will have 28 days after appointment as a director to apply for a DIN. Following this period, individuals must apply for a DIN before becoming a director. For existing directors, transitional provisions will provide a period during which they will need to obtain a DIN.

Whilst directors will be required to have a DIN, the obligation is to have applied for, rather than obtained, a DIN prior to appointment as a director.

This is to provide flexibility, and a defence, for circumstances where a DIN has not been issued for reasons outside the control of the relevant person (e.g. processing delays).

Consequences for non-compliance

Under the proposed regime, there will be civil and criminal penalties for:

• failing to apply for a DIN within the prescribed timeframes;
  
• failing to apply for a DIN if directed by the registrar;
  
• intentionally applying for more than one DIN
  
• intentionally providing a false DIN to a government body or relevant body corporate; and
  
• being actively involved in the contravention of any the above offences.

“You have to understand accounting and you have to understand the nuances of accounting. It’s the language of business.” – Warren Buffett

A misconception among small business owners is that accounting only involves managing your books and paying your dues. But there are many little things in accounting that you should consider. This is where the problem usually starts. If you’re not careful, you might end up messing up your cash flow, or worse, paying penalties for unpaid taxes. It’s time to look at your accounting practices and make sure you’re not making any of these mistakes.

1. Mixing Personal Spending with Business Spending

Confusing your personal spending as a business spending is a common mistake among entrepreneurs. For instance, when you’re doing your monthly supplies run, it’s easy to pick up some items for personal use and unintentionally tag all them as a business cost. The key is to keep all your receipts. This way, you have proof of your expenses should your business requires to be audited. Worried about losing receipts? Scan or take photos of them, so you have a digital copy. Consider filing them by month or year and labelling them appropriately by category or department. When you categorise your business expenses, you won’t have problems finding records or receipts.

2. Taking Sales Tax for Granted

It’s quite easy to forget about your sales tax —especially if you have no idea how to deal with them. To make sure you’re complying with all your tax requirements, consider consulting or hiring experts to look into your finances.

3. Working with an Inexperienced CPA or Bookkeeper

Your CPA and bookkeeper are your sidekicks to managing the financial side of your business. It’s essential to work with professionals who have enough experience in their field. If you’re new to accounting and will have to depend on your CPA or bookkeeper’s knowledge and skills, take the time to choose candidates and professionals to hire.

4. Thinking Every Deal Closed Always Equates to Cash Flow

When you’re updating your books and forecasting cash flows, be mindful of how you record your deals. When you don’t consider the money your company needs to put out to complete a project, your books could give an inaccurate picture of your business’s financial status. What happens when instead of earning from a deal, you end up losing money? Do you need assistance with accounting? Glance Consulting offers bookkeeping, accounting, and cash flow forecasting services. Let us help you get the peace of mind that you have your books in order and your finances straightened out.

Please fill out our contact form or give us a call at 03 9885 9793 to learn about our accounting services.