According to the recently-released ATO data, there were 5,840 SMSFs established in the March quarter – fewer than any quarter as far back as the data stretches, to the June 2008 quarter.
In his latest Trialogue update, Tria managing partner Andrew Baker said the financial media’s ‘breathless’ reporting attributing the decline to government tinkering failed to take into account the lack of certainty around the numbers.
Nobody knows for sure if those numbers are accurate, including the ATO, according to Baker.
“That’s because the numbers the quarterly reports are based on are just estimates, based on data which is most likely nearly two years old,” he wrote.
He pointed out that the ATO publication clearly stated the numbers are estimates, but added the ATO should do more to highlight that fact, as well as the limitations of the data, and that it should be used carefully - if at all.
“Frankly we don’t know why the ATO bothers with publishing quarterly data, given its outputs could be criticised as being anywhere between heroic and misleading. Gospel it is not,” Baker said.
“The facts are that there is only one really useful and representative source of truth when it comes to SMSF data, and that is SMSF annual tax returns.”
Even those returns are lacking in terms of capturing a “broad swathe” of SMSF data, especially around things like asset exposures, according to Baker.
He also pointed to the significant time lag involved with lodging of the annual tax returns upon which the ATO relies for its data, with returns due in May for the prior June end of financial year. This leads to an adjustment in August, more than a year after the financial year end.
“So the idea that that ATO is publishing accurate March 2013 SMSF data is simply preposterous. It’s probably still based on June 2011 data at the moment,” Baker said.