One SMSF administration services provider believes many accountants have still not mastered the basics of providing SMSF compliance advice, pointing to what he believes are “relatively low” on-time lodgement levels.
Superfund Partners director Kris Kitto told SMSF Adviser he believes most of the less serious breaches, which are generally inadvertent, often stem from poor advice.
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.
SUBSCRIBE TO THE SMSF ADVISER BULLETIN
- 08:20Data feeds unreliable for new reporting, says mid-tierBy Miranda Brownlee
- 08:00Tax component confusion spurs potential tax liabilitiesBy Miranda Brownlee
- 08:00Contributions triple in June quarter, survey showsBy Staff Reporter
- 17 Aug 2017Industry questions ATO’s capacity for new reportingBy Miranda Brownlee
- 17 Aug 2017Qld succession law changes tipped to impact SMSFsBy Miranda Brownlee
- 16 Aug 2017Contribution limits restricting future balances, warns mid-tierBy Staff Reporter
- view all
- Data feeds unreliable for new reporting, says mid-tier
With an estimated 20 per cent of SMSFs still encountering errors from data feeds, one mid-tier firm believes the ATO should allow SMSF pract...read more
- Tax component confusion spurs potential tax liabilities
A lack of understanding around taxable and non-taxable components in super funds could be exposing SMSF clients to unnecessary tax liabiliti...read more
- Contributions triple in June quarter, survey shows
The average contribution amount from SMSF trustees tripled for the June 2017 quarter, with super members looking to maximise their contribut...read more
- Industry questions ATO’s capacity for new reporting
With events-based reporting set to generate huge amounts of data, concerns have been raised about whether the ATO’s systems will be able t...read more
- view all