Admin provider takes shot at accountants

In his experience, two of the most common administrative breaches are assets being held in an incorrect name and late lodgement of annual returns.

“What’s disappointing from my perspective as a professional is that some of my peers are not getting the basics right,” said Mr Kitto.

“On-time lodgement is still relatively low at 80-90 per cent and the ATO is constantly correcting errors with funds incorrectly calculating the exempt pension income when an SMSF is paying pensions to members,” he said.

Mr Kitto also noted that while there have been significant improvements in SMSF administration technology, many accountants are still not using it.

The penalties for getting things wrong can be severe, he said – potentially $10,800 per breach per trustee, which trustees each have to pay personally.

“In addition, in severe cases trustees can be banned from running an SMSF and the fund can be made non-compliant,” Mr Kitto said.

“There was even a recent case where a trustee was made to do 80 hours community service for intentionally failing to lodge his SMSF annual returns.”

He noted, however, that only approximately two per cent of SMSFs have any negative reports made to the ATO and that in turn, only a small proportion of this two per cent have any serious kind of breach.

“There are so many great professionals that are out there that are really passionate and provide a fantastic service to clients, but it’s disappointing when [some professionals] are still getting the basics wrong,” Mr Kitto said.