As part of its compliance action on overdue SMSF annual returns over the past year, the ATO has written to 50,000 SMSF trustees, advising them that their lodgement is overdue and that the fund’s details have been removed from Super Fund Lookup (SFLU).
The ATO said super funds and employers should not roll over benefits or pay super guarantee payments to funds that aren’t on SFLU.
“We’ve warned these funds our next step will be to impose failure to lodge penalties,” the ATO stated in an online update.
“We also advised these funds to consider whether they want to continue operating their SMSF, and if not, we directed them to guidance regarding what they need to do to wind up their SMSF and avoid future lodgement, reporting and auditing responsibilities.”
The ATO said lodging SMSF annual returns on time is a critical part of an SMSF trustee’s legal responsibilities.
“Where SMSFs have one or more years of overdue lodgement, we will remove them from Super Fund Lookup (SFLU) and apply failure to lodge on time penalties,” it said.
BDO partner, superannuation, Shirley Schaefer previously told SMSF Adviser that in the past few months, the ATO has been much more active in terms of removing registration details from Super Fund Lookup where the fund has more than two years of late lodgements outstanding.
“They’ve certainly been a lot more active around this than they have been in the past, and I suspect that will continue,” she said.
Earlier this year, ATO assistant commissioner Dana Fleming said following the ATO’s non-lodgement program last year, there has been a reduction in the number of non-lodgers across the SMSF population, with the number of overdue lodgers dropping from 87,000 down to 66,000.
Ms Fleming said while non-lodgement can be a red flag in terms of compliance, in other cases SMSFs may have previously had good compliance history but reached some type of roadblock or administrative difficulty and just stopped lodging.
Back in May, Ms Fleming stated that the lodgement figures for the 2018 income year were shaping up to be the best lodgement result in five years, with the ATO predicting that 91.3 per cent of all 2018 SMSF annual returns would be lodged on time.
“Excluding 2017, when there was an extension to 30 June 2018, this is the best result in five years. Only 3.8 per cent were lodged late and less than 5 per cent remain outstanding,” she said in May this year.
