Superfund Partners director Kris Kitto told SMSF Adviser he believes most of the less serious breaches, which are generally inadvertent, often stem from poor advice.
In his experience, two of the most common administrative breaches are assets being held in an incorrect name and late lodgement of annual returns.
“What’s disappointing from my perspective as a professional is that some of my peers are not getting the basics right,” said Mr Kitto.
“On-time lodgement is still relatively low at 80-90 per cent and the ATO is constantly correcting errors with funds incorrectly calculating the exempt pension income when an SMSF is paying pensions to members,” he said.
Mr Kitto also noted that while there have been significant improvements in SMSF administration technology, many accountants are still not using it.
The penalties for getting things wrong can be severe, he said – potentially $10,800 per breach per trustee, which trustees each have to pay personally.
“In addition, in severe cases trustees can be banned from running an SMSF and the fund can be made non-compliant,” Mr Kitto said.
“There was even a recent case where a trustee was made to do 80 hours community service for intentionally failing to lodge his SMSF annual returns.”
He noted, however, that only approximately two per cent of SMSFs have any negative reports made to the ATO and that in turn, only a small proportion of this two per cent have any serious kind of breach.
“There are so many great professionals that are out there that are really passionate and provide a fantastic service to clients, but it’s disappointing when [some professionals] are still getting the basics wrong,” Mr Kitto said.
I guess Kitto is one of those rare people who has never made a mistake in his “professional” life.
With only 2% of SMSF’s having negative reports to the ATO, apparently, this seems like a pretty good number…
Kris who?
There are very few breaches reported by SMSF auditors who audit funds for Administrators as the administrators are their only employers and because A Dog never bites his Master – Mr Kitto is living in a fools paradise.
Mr Kitto has responded saying that we don’t have to agree with what he says. This is, to some extent, true, My reply is that I find it difficult to not respond when what is written is a load of codswallop.
I find the main reason that SMSF’s returns are lodged late is that the clients do not provide the information until May and there is a rush to get them audited.
I should also point out that we “inherited” a couple of funds from SMSF admin providers that were also lodged late and their fees were almost triple what we charged.
Perhaps Mt Kitto would like to tell us what his lodgement performance has been over the last few years?
OK – I normally don’t bother reading or responding to these comments – but feel obliged to put some context around my words.
I discussed quite a number of things with SMSF Adviser for some content “[i]directly targeted at SMSF trustees[/i]”.
I stand behind my comments. You don’t have to agree with them.
I agree with Manoj and George comments. The last experience a client had with an admin provider was that everything was so late, tax returns were not lodged until July the following year with at least two applications for extensions of time for lodgement.
It is the pot calling the kettle black. Get your own house in order before criticising others.
I am trying to work out Mr Kitto motive in making these comments – he is not ATO, nor is he ASIC or a professional body. So wondering who actually appointed him to police the game.
Unless he is making noise to tell everyone that he is “great professional”.
Now this is what you call unmitigated gall! An admin provider attacking accountants! I have seen so many errors from these people that, as Shakespeare said, Let me count the ways. And we haven’t even talked about the ridiculous fees they charge!