Accounting & Tax Update 2022

By Peter Vickers Business Group | Accounting, tax, land tax, accounting software |

DIRECTOR NUMBERS

Every company director will be required to have a unique director identification number that they will need to link to the companies of which they are directors. The nut that the regulators are trying to crack with this sledgehammer is that a few directors of the 2.2 million companies in Australia are still becoming directors when they may have been banned.

The government has set up Australian Business Registry Services under the Australian Taxation Office to handle this. You need to apply for your Director ID yourself as we cannot do this for you. However if you think that you will have difficulty then we can try to assist you.

There are three ways you can apply:
1)   Using your MyGovID app and email
2)   Phone application
3)   Paper based using a PDF fillable form
All require primary documents to be made available and also other information.

One of our clients who is 97, has dementia and has given up her driver’s licence and passport but is still a director may have a problem.

Once you have your Director ID number it needs to be given to ASIC for each company that you are a director. This system is currently not ready to operate. The other issue is that the ASIC company records may need to be changed so that they agree to your Director ID information. This part of the process we can and will assist with once it is up and running. This must all be done by 22 November 2022 except if you wish to become a new director of a company.

LAST LODGEMENT DATE FOR TAX RETURNS

If your income tax return is lodged by a tax agent then the Australian Taxation Office gives us until 16 May 2022 to do so. This is a Monday as the 15th is a Sunday. However we require a minimum of 2 months to prepare your accounts and returns so please have your information to us by mid-March at the latest. We have no problem with you missing this deadline as long as you have no problem paying the interest penalties. But be warned, if you returns are not lodged by the 30 June then next year the lodgement date is reduced to 31 October.

LAND TAX

Revenue NSW celebrates New Year’s Eve by taxing all property in NSW owned at midnight 31 December. The primary place of residence and primary production land are exempt and this year’s threshold is $822,000. The tax is $100 plus 1.6% of the amount above this threshold up to $5,026,000 when the rate goes to 2% above this premium threshold.

Discretionary trusts and foreign owners of residential land do not get a threshold and these foreign owners get slugged with a further 2% surcharge. There are strategies for minimising land tax and we can have a discussion about how to plan for this before you buy a property.

ACCOUNTING SOFTWARE

Accounting software companies wrote accounting software specifically for public accountants. Australia and New Zealand thus had some of the best accounting software in the world. However with the GST these companies realised that there are 2 million small businesses and only 10,000 firms of public accountants. So they went with the biggest part of the market. However small businesses do not need nor want to understand the intricacies of accounts preparation. Why do you have to reconcile the bank account in the accounts to the bank statement? What is share capital? What is wrong with historical balancing item under equity? Do we really have to have comparatives? And do they really have to agree to the figures last year?

All the software providers have thus updated their programs and we have had to change our very efficient method of operation. And this is for no benefit to our clients. We will ensure that you are not disadvantaged by these changes which you may not even notice.

_{The advice in this newsletter is general advice and does not take into account your individual objectives, financial situation or particular needs. Do not take any action based on the information provided without first discussing it with us.}

If you’d like more information on how to grow your business, please contact one of our accounting and tax experts using the button below.

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