In a recent interview with SMSF Adviser, ATO assistant commissioner Dana Fleming said SMSF auditors would be included in the myGovID system as part of the proposed rollout of online services to businesses (OSB) in 2020.
“I’m advocating for SMSF auditors to be brought in as early as possible because they currently have a really old legacy system to lodge their audit contravention reports which is not integrated into other ATO systems,” Ms Fleming said.
“I’ve asked for them to be included in phase one of the move to OSB but if not it will be phase two, so that may be late next year. And once we have the legislative partners like tax agents and auditors in OSB and using MyGovID then we can move to the ‘nice-to-haves’, like getting financial advisers access if they are legally allowed access.”
Ms Fleming said the ATO was “very conscious of the need” for more stakeholders in the SMSF industry to be able to access up-to-date trustee data, particularly given increasing incidences of trustees being issued mistaken breach notices due to incomplete super balance information.
“There’s a lot of project work going on across the ATO about how we connect electronically with the sector other than just accessing through OSB,” she said.
“We’ve got to deal with the issues of privacy and access around myGovID and that will be partially dealt with as part of the Relationship Access Management that we are doing as part of the phases one and two move to OSB, and later potentially broader than that.
“So, once we deal with who’s allowed to have access and how we can allow people to get access, the next question is what are the right things to be giving access for? That is, what does the industry really need? This will require consultation with industry.”
Ms Fleming said while it was “not reasonable” to expect SMSFs to move to a 10-day reporting cycle as APRA-regulated funds had, the ATO encouraged SMSF professionals to report pension activity in real time via the TBAR to avoid errors in the system.
“Generally, if the SMSF reports the pension to us basically when they commute it or start it, we will get that processed within the same time as the APRA deadline of 10 days, so you avoid having the reverse workflow of dealing with double counting of a pension,” she said.
“SMSFs can report in real time and avoid that situation, but the question is, do we need to change the system so that everybody can and does do that and is aware that it’s a legal obligation – to stop those situations arising where excess transfer balance determinations are issued in error due to lags in reporting by SMSFs.
“I think we can never expect an SMSF to go to 10-day reporting, but more regular reporting on a frequency basis is inevitable because, otherwise, the system is going to keep creating errors and frustration for everybody.”
I support the initiative. As a SMSF auditor, I have for several year been reporting completed audits to the ATO. I trust this will improve the system. I also trust this will improve the information we can supply to the ATO. One of my biggest concerns is our inability, as auditor, to be able to confirm that our audit results are advised to the ATO when we qualify an audit. We have no way of knowing if the annual return that is lodged is correct. With an improved advice system, the audit complete advice lodged by auditors could become a requirement, and include 2 simple questions, in addition to confirming who actually did the audit. Is Part A and is Part B qualified. This could then be reconciled to the Annual return automatically. This will assist in confirming correct audit details are known to the ATO.
Great initiative.