Written by Mary Simmons, Head of Technical, SMSF Association
As part of the ATO’s commitment to safeguarding taxpayer’s information from fraudulent activity and identity theft, an added layer of verification will be introduced to ensure that only authorised tax agents, BAS agents, or payroll service providers can link to an SMSF.
The client-to-agent linking protocol became standard for all entity types with an ABN, excluding sole traders, from Monday 13 November 2023. This includes SMSFs.
While this update is rooted in a strategy to curb fraud, it is our understanding that for the majority of existing SMSF trustees, the daily operation of their fund remains unaffected. This change only impacts SMSFs seeking to nominate a new agent or make changes to existing agent authorisations.
For SMSFs that do not require a change to their authorised agent or a change to the authorisations given to an existing agent, the transition will be seamless; there is no need for action or concern. This ensures that stability is maintained for the overwhelming majority of funds, who can continue to rely on established client-to-agent links and authorisations.
In addition, status quo is maintained when establishing new SMSFs. During the ABN/TFN registration process, the inclusion of an agent’s details remains a straightforward procedure, allowing an agent to be linked to an SMSF from the outset.
The full implications of the recent changes will unfold progressively. However, it is immediately apparent that if SMSFs with a corporate trustee need to use the online service to nominate an agent or change agent authorisations, they will need manual intervention by the ATO. The primary director of the corporate trustee will need to contact the ATO on 13 28 66 to receive step-by-step guidance on linking their MyGovID to the SMSF’s ABN. This change is not confined to SMSFs and affects all trust structures with a corporate trustee.
As always, the real impact of these changes will only emerge over time as the additional layer of process is tested against the day-to-day realities faced by agents. At present there is a strong sense of trepidation as to the impact it will have on agents who are already stretched due to staffing shortages and the constantly changing policy landscape.
It is expected that many trustees will also be apprehensive about the new online service requirements, particularly in light of the challenges many faced when trying to set up a MyGovID account to register for a Director ID late last year.
As the SMSF sector adjusts to the new security enhancements and the added layer of process, listed below are some considerations to ensure that interactions with the ATO’s online services are streamlined, to try to minimise the burden on trustees and their authorised agents.
- Trustees are encouraged at all times, through their agent or directly, to ensure the SMSF’s ABR records are up to date.
- SMSF trustees are encouraged to avoid last-minute agent changes, especially as key lodgment dates for annual returns, BAS and TBAR approach.
For more detail, the ATO has just released the following information:
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