Speaking at an event in Sydney, SMSF Association head of technical Peter Hogan said the ATO had initially floated the idea of commencing the events-based reporting scheme after the lodgement of the 2016-17 financial year return.
“My suggestion was that it was a little early for everyone because of the systems that would need to be in place and the fact that only 10 to 15 per cent of funds lodge by October,” Mr Hogan said.
However, Mr Hogan said ATO Assistant Commissioner Kasey Macfarlane confirmed in recent discussions that the tax office is considering either 15 May next year or 1 July 2018.
“The initial reporting regime will only involve transfer balance account transactions, so debits and credits, and will not involve the total superannuation balance,” he said.
“These transactions will be reportable 10 days after the month in which the transaction occurs.”
The exception to this will be the commencement of pensions.
“What the ATO is suggesting with pensions is that they’ll need to be reported at least 28 days after the quarter in which the pension was commenced in order to give SMSF trustees time to appropriately value assets,” Mr Hogan said.
While at this stage the obligation to start reporting on a more regular basis for SMSFs won’t happen until at least May next year, SMSF practitioners and clients will still need to be conscious of the value of any transactions.
“Because when the first report does occur, you will then need to back-fill the reporting history back to 1 July 2017, from when the first transaction happened,” Mr Hogan said.
“So the first month that the fund has a reportable event, you’ll have to back-fill everything in from 1 July 2017.”
The Tax Institute’s senior tax counsel Robert Deutsch said the ATO appears set on events-based reporting and warned that it’s likely to “put a huge amount of pressure on tax agents and the trustees of small funds and SMSFs”.
“Consequently, The Tax Institute and other industry bodies continue to liaise with the ATO in an attempt to ensure that there will be sufficient time for agents and funds to prepare themselves before these changes commence,” Mr Deutsch said.
“It is critical that the ATO provides a long transitional period to allow SMSFs and their advisers to become accustomed to the new system.”
Not to mention the additional cost to the Super Fund of more work by the accountant
This is yet another potential expense to Trustees in ever spiralling costs of running an SMSF hitting the little man again. Why would any young person consider tying up his life savings in super today when the Government continues to move the goal posts daily. I have been in the industry for 40 yrs and my life savings is in my SMSF but if I had known just how much Government tinkering was going to take place especially at a time when I should be enjoying my retirement I would never have gone down the super track.
For heavens sake just leave super alone before you completely kill it off.
One angry retiree
Yet another burden on the Tax Agent. Better check my private health insurance is up to date. I’m overdue for a heart attack. (and I’m only 40 something)
And what will be the consequences of the inevitable late lodgements? And how easy will it be to make amendments that will no doubt be required when additional information inevitably comes to light?
90 days + another 28 may be reasonable for calculating balances but 28 days is not. Do we now have to consider advising a client to make changes at the start of the quarter instead of the end simply because reporting requirements are too tight? 10 days is ridiculously tight. It makes it almost impossible for someone in a small firm to even consider taking a week off.
There needs to be consistency and a level of reasonableness. This does not exist in this proposal.
Maybe time to leave the cottage industry and move into the 21st century. There are plenty of options that provide real time price reporting and transactions for SMSFs. Get with the times.
Jimmy, but what about the clients who have deliberately chosen to support their local ‘cottage industry’ because they do not want the bells and whistles of the 21st century? Bigger and better software has a price and small firms with less than 50-100 SMSF’s are unlikely to be able to fork out for it (same for the clients they attract). The ATO should do their own data collection at their own expense in their own time – it’s bit of a nanny state wanting to know everything at all times immediately after it happens anyway.
More and more is piled onto accountants and it shows; deadlines are not being reached with the increasing workloads (SMSF due date extended to 30 June evidences this). The ATO can’t even provide a reliable Tax Agent Portal service yet accountants get hung drawn and quartered every year with these very time consuming changes….. maybe this is more of a case of ATO overreaching than a get with the times moment.
Jimmy, I was actually referring to the ability of managed funds/unit trusts to provide information in a timely manner, not my ability to calculate a balance provided all information is available.