No plans to tighten TBAR timeframes further, says ATO
The ATO has assured SMSFs that it has no plans to move SMSFs to monthly-based reporting at this stage.
In late June this year, the ATO announced that from 1 July 2023, transfer balance account reporting (TBAR) for SMSFs will be streamlined, with all SMSFs being required to report an event 28 days after the end of the quarter in which an event occurred.
This followed a consultation with industry initiated in November last year.
Speaking on a recent podcast, ATO client engagement director Dalila Vellotti confirmed that while all SMSFs will be moving to quarterly-based reporting from 1 July next year, the ATO doesn’t intend to further reduce the reporting timeframes for TBAR.
“We’ve listened to the feedback from the consultation earlier this year and most funds, advisers, and the community did not want more frequent reporting,” said Ms Vellotti.
“So at this stage, there's no intention to move to more frequent reporting such as monthly.”
Ms Vellotti said the consultation indicated that SMSF industry generally supported moving to a quarterly-based reporting framework with delayed reporting causing a range of issues.
“Where the transfer balance account report was lodged with the SMSF annual return, in some instances there was a delay of up to 18 months in the reporting,” she explained.
“These delays were leading to poor experiences for clients and reverse workflows.”
Ms Vellotti noted that some clients were in excess of the transfer balance cap and incurring additional tax and were unaware of this until the event was reported to the ATO.
“That was on of the big challenges and one of the reasons leading us to reconsider the annual concession,” she stated.
Speaking in the same podcast, Smarter SMSF chief executive Aaron Dunn said SMSF firms and professionals are generally now in a much better position to handle quarterly-based reporting compared to when transfer balance account reporting first came in back in 2017.
“There is now a much larger cohort of tax practitioners and therefore SMSFs that have real time reporting available to them through software,” said Mr Dunn.
“We know that there is around north of 450,000 funds now using cloud-based SMSF specific software. So the industry is now much better equipped now to be able to handle this because of the advancements that we've seen in technology in the sector as well.”
Miranda Brownlee
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.
