In a recent blog post, the SMSF administrator’s managing director, Meg Heffron, said while the new deadline imposed by the ATO may seem extreme, it could help to incentivise less diligent clients to provide paperwork to their accountants in a timely fashion.
“While a two-week grace period does seem extremely harsh, there are some ways in which it is very beneficial to accountants and SMSF administrators who have trouble ‘encouraging’ recalcitrant trustees to respond to numerous requests for information,” Ms Heffron said.
“In a way, the ATO is voluntarily adopting the ‘bad cop’ role, meaning accountants and SMSF administrators don’t have to.”
Ms Heffron added that the ATO’s move to crack down on late lodgers made sense given that the office needed up-to-date statistics on SMSF holdings in order to properly regulate the sector.
“Without funds lodging what they are supposed to lodge when they are supposed to be lodging it, the ATO is flying blind,” she said.
“If we wish to continue the freedom to operate a dynamic and flexible SMSF environment without draconian regulation, we have to accept that the regulator needs information.
“Timely and accurate information also helps dispel myths peddled by those outside the SMSF sector about SMSFs being unregulated, irresponsibly run and ripe for fraud.”
However, Ms Heffron conceded that the new system was likely to cause problems for trustees relying on contributions or rollovers as part of a broader investment strategy, especially given the delays commonly experienced by funds waiting for the ATO to reinstate their complying status on Super Fund Lookup.
“While status will be returned to ‘complying’ when the return is lodged, historically in our experience this process can take six weeks,” she said.
“We are hopeful this may be improved by the fact the ATO will undertake their new process of removing/restoring complying status at the beginning of every month.”
Forces at work aiming to make it so difficult that people fold their SMSF and simply revert to industry/union funds. This has all been orchestrated as they have billions of dollars to win, meaning millions in increased revenue for the funds, for unions and for Labor.
Just another instance of the big stick approach which now looms over the head of ALL funds and ALL firms working in this space. A more targeted approach – fine the trustees of funds for late lodgement personally. Ultimately it is their duty and they are in breach. More and more rules in this space. As the wealth in Super Grows so does the Governments targets for fundraising from this wealth source. Make the rules so complex that decent people and service providers trip up and it will cost them much more than for a small business – because they can afford it. It would be great if research could be done on the proportional amount of fines and imposts that now apply to small business in comparison to SMSFs.
Considering the ATO needs 28 days to even look at most things, then two weeks is ridiculously harsh. Even in this article, it says the complying status won’t be returned for 6 weeks. If it only takes two weeks to lose it, then it should take less than two weeks to restore it. Six months late, fine. Serial repeat offenders with reported breaches, fine. But two weeks for all! Come on!