Australians with businesses could be fined $13,000 by the Tax Office in a WEEK because of a new law

More than one million Aussies are facing fines of up $13,000 from the Australian Tax Office as a new law comes into force in a week’s time.

The ATO is requiring the heads of companies, small businesses, non-profit organisations, charities, community groups and corporate trustee’s to have a director identification number (director ID) by November 30.

Those who fail to apply for a director ID by the deadline could risk a fine of up to $13,200 under a recent change to the Corporations Act. 

Around 1.4million Aussies have applied for a Director ID – a unique 15-digit identifier for all companies, organisations and registered bodies – so far, according to a statement from the ATO.

But this is out of the 2.5million directors across the country, meaning there are still about 1.1million directors who still do not have an ID and are at risk of a fine. 

Director IDs will be used by authorities to help track down those acting in a fraudulent or deceitful manner. 

This includes tracking entities where there is a ‘dummy director’ listed. Fake directors could be a friend, relative or associate to the real director. 

IDs have also been enforced to stop ‘phoenixing’, which is where a company transfers assets to a new entity and then liquidates or abandons the old company to avoid paying debts to creditors.

The ATO is enforcing the law next Wednesday in a bid to crack down on heads of companies and organisations committing fraudulent activity (stock image)

As the ATO deadline looms closer, so have the number of registrations from directors, with the ATO revealing a whopping 28,426 directors applied on Monday alone. 

Australian Business Registry Services Deputy Registrar Karen Foat has warned directors not to miss next week’s deadline and register immediately.

‘Some people might not actually realise they are a director of a company. You don’t have to wear a suit or work in an office to be considered a director,’ she said.

‘If you run a small business, self-managed super fund, a not-for-profit or even a large sporting club, you may be a director, which means you’ll need a director ID.’

Registering a director ID is free and only requires a proof of ID. Most directors use their bank account details or an ATO notice of assessment.

You can apply for a director ID on the Australian Business Registry Services website. 

Sole traders and contractors are excluded from needing a director ID.