ATO highlights ‘intensive compliance’ areas
The ATO has outlined areas it will be upping its compliance resources this financial year, as it continues to change how it engages with SMSF trustees and the auditing process.
In some circumstances, as previously indicated, the ATO will be changing the way it responds to auditor contravention reports (ACRs.)
“In the 2015 income year 22,000 contraventions were reported in 8,200 funds; of these, over 50 per cent of the contraventions had been rectified when reported in the ACR. Previously, following the receipt of an ACR, if we assessed a fund as high risk, we would automatically select it for a comprehensive audit,” the ATO’s Kasey MacFarlane told the Tax Institute’s superannuation conference.
“However, this year we will be changing our approach. Instead, where trustees are willing to engage with us, they will be supported to self-correct and rectify compliance issues through the early engagement and voluntary disclosure service and/or from targeted mail outs.”
Ms MacFarlane said the “shift in emphasis” will allow the ATO to increase its focus on problem areas such as trustees who are deliberately and persistently not complying with their obligations; trustees who are deliberating operating outside the system, for example, by avoiding lodgement and audit obligations; trustees who are adopting aggressive tax positions and trustees who are not willing to engage with the ATO.
The sector remains largely compliant, however, and there was a significant reduction in the number of funds made non-compliant last year.
“During the course of 2015-16, we saw a 38 per cent reduction in the number of funds with enforceable undertakings. Conversely, the number of rectification directions we issued increased by 70 per cent,” Ms MacFarlane said.
“Pleasingly, there was a small reduction in the number of trustees disqualified and a significant reduction in the number of funds made non-compliant, with a 54 per cent increase in education directions issued to SMSF trustees.
“These figures and compliance outcomes for 2015-16 reflect an increasing use of our new enforcement tools for regulatory breaches after 1 July 2014.”
