The SMSF administrator’s principal, David Busoli, told SMSF Adviser that the new rules were an indication the ATO was “losing patience” with administrators who were not complying with their lodgement responsibilities, as many were lodging a significant proportion of their returns more than six months late.
“Some of the big administrators by 30 June had only lodged 60 per cent of their funds, and if you have a 60 per cent lodgement as at 30 June and they are supposed to be lodged six months before that, there is a problem,” Mr Busoli said.
“With the ATO turning a greater focus to this particular area, one would think it is a timely reminder that service providers need to get their act together and actually lodge on time.”
Mr Busoli said the ATO had already been suspending contributions for late-lodging funds prior to the new announcement, but that the two-week time frame would provide a more concrete deadline for administrators to work towards.
“This new approach does not mean you have to meet the absolute lodgement date because you can still get extensions, but you will have to meet the extended date,” he said.
Mr Busoli added that the move was likely to cause problems for rollovers in particular, given the complexity involved in the process.
“Where it will have an effect is where people are trying to roll over, because when you’ve gone through the process of the rollover and everything looks fine and then the institution checks and finds you are no longer on Super Fund Lookup, you may have to go back and redo the whole rollover process,” he said.
“The other thing I’ve discovered is that the reinstatement [of funds on SFLU] can take a little longer than the ATO has indicated, and that could cause further issues.”
If the trustees are the problem, fine them personally. The money cannot be taken from the fund to pay for their ill-discipline and inability to meet their fiduciary duties.
If it is the tax-agent’s fault, then appropriate sanctions.
It takes a bit of organising to get 100% lodgement ontime, because not all clients are diligent, but an effort is required by the practitioners too. Online software does not make much of a difference – you cannot finalise a fund without relevant paperwork.
In any case, the legislative complexity & constant changes means even the regulators must take some of the blame. Stop moving the goalposts and asking for more and more and more. Very sick of the ATO outsourcing their workforce to unpaid tax agents to help them implement measures which only serve to make the ATO’s workplace more efficient and in the mean time the practitioners are not getting paid for this free service! (SuperStream, STP to name the most recent largest ones). It was not and has not been the ATO helping small business & SMSF’s with compliance. It is the often UNPAID practitioners.
“Some of the big administrators by 30 June had only lodged 60 per cent of their funds, and if you have a 60 per cent lodgement as at 30 June and they are supposed to be lodged six months before that, there is a problem”
One of the problems is that a supposed expert does not know when the lodgement dates actually are. The dates are either Oct 31st (for new funds and funds with overdue retruns) , March 31st (for funds where income exceeds $2,000,000) or May 15th for everyone else.
If you are a SMSF administrator on 30 June and believe you are 6 months late, perhaps you are part of the problem.
Rather then suspending contributions which raise all sorts of issues for employers who are trying to pay compulsory super into a fund, why not just hit the fund with additional tax of 15% until lodgements are caught up.
As usual the regulator has over reacted. Rather than hitting the whole indistry just target the recalcitrant administrators. Its a very simple concept – prosecute suspend TA licences then name & shame. It wont take long for most to toe the line.
A super concept that the ATO should take up
There are trustees that are always late. But it is totally unacceptable if large administrators are so far behind. If this is the case then I think it is a great idea to remove these practitioners from the industry.
Usually with late lodgments, the trustees come to an administrator after the fact of the lodgment deadline already having passed.
On 22 May this year the ATO reported a lodgement number of 91.3%. The Assistant Commissioner commented that this was a fantastic result.
So what has changed. Why this new policy. It makes no sense. Is this just a case of the ATO bias against SMSFs
Rather than punishing the individual funds why not name the rogue administrators, suspend their tax agent licences , hit them with penalties & force them out of the industry.
Surely this is a better way to clean up another messy problem created by the ATOs previous inaction.