Addressing the SMSF Association National Conference 2021, ATO commissioner of taxation Chris Jordan said the SMSF sector has played a crucial role and, together with the ATO, weathered a challenging year.
“The challenges facing SMSFs have never been more front of mind than in the wake of COVID-19. I know your work only became more challenging this past extraordinary year. That’s why I was so pleased our strong working partnership never faltered,” he said.
“Throughout it all, you remained engaged to ensure we provided you with the right support. I believe our existing, strong partnership and formal statement of intent were vital in allowing us to work together productively.”
Mr Jordan highlighted the fact that robust, effective partnership has existed for many years is evident in the tax performance of the SMSF sector.
“The latest tax gap for small super funds shows around 97.5 per cent compliance, an outstanding result. And reported regulatory contraventions among self-managed super funds are currently tracking at about 2 per cent,” he said.
“I believe a key factor behind this is your willingness to work closely with us to achieve better outcomes for your clients.”
But Mr Jordan noted there is still work for the ATO to do for the SMSF sector as it heads into a post-pandemic environment.
“We will continue to take a supportive approach throughout the pandemic, but we also have an obligation to protect the integrity of the system,” he said.
“We owe it to those people doing the right thing to pursue those who do not. One of our current focus areas is ensuring only genuine trustees can establish SMSFs.”
Mr Jordan noted that during the 2020 financial year, 22,000 new self-managed super funds were registered, a 7 per cent increase from 2019.
“Of those, about one of five were selected by our risk models and were reviewed. As a result of our rigorous checks, we protected an estimated $126 million from leaving the super system illegally,” he said.
“Of course, we know there are also some people who try to comply but fall short. For example, about 14 per cent of the 2019 SMSF annual returns haven’t yet been lodged, though we acknowledge this may also be due to COVID-19. That’s why our priority continues to be making it easier for people to meet their obligations.”
Mr Jordan said the cornerstone of that approach will be placing importance in advice and education.
“An example of this is our response to the new independence guide released in May. As you’re no doubt aware, the guide provides strict new advice about in-house auditing,” he said.
“And rather than immediately taking a firm stance, the ATO is using the 2021 financial year as an opportunity to educate the industry about this issue. As part of this, we will be providing further guidance on our website in the coming months and deferring compliance action until after 1 July.”
