SMSF professionals reject ATO reporting changes
Industry polling indicates SMSF professionals are not on board with the ATO’s push towards real-time reporting for SMSFs, with one SMSF specialist saying there are “major” practical implications with the practice.
The ATO flagged late last year that it was looking to real-time reporting, for things such as pension commencements and commutations, to ensure trustee compliance with the new superannuation legislation.
A recent poll on SMSF Adviser asking the question “are you on board with the ATO’s plans for real-time reporting” revealed professionals are largely against the move, with 71.1 per cent of 350 respondents answering ‘no’, and 28.9 per cent answering ‘yes’.
Verante director Liam Shorte said that while real-time reporting “is a good idea”, the practice opens the door to administrative inefficiencies that are “out of the control” of trustees and accountants.
“I can see major issues in the actual practical implications of such [a] measure, and foresee that it plays into the hands of the bigger administration platforms and out of the control of mum and dad [SMSF] trustees and suburban accountants,” Mr Shorte said.
“This will be a major issue for those that deal with their clients on an annual basis for accounting and audit.
“It will also be an issue where the SMSF trustees are DIY, self-directed investors. In most cases, they will keep their paper records during the year or via their stock broker and bank accounts, but they only supply the information to the accountant or adviser annually.”
Mr Shorte added that real-time reporting is sometimes unrealistic, given that certain financial projects, such as consolidating existing pensions, take months before accurate figures are produced for the ATO.
“We will prepare a pension kit, but the kit allows for the fact that the final figures for the pension may not be known for five to nine months when investment tax statements and reports come through from the listed and unlisted investments for financials to be completed,” he said.
“So yes, we can report that the client is starting a pension or reconsolidating, but we would not be able to provide the account balances required for the ATO to track against the pension transfer limit.
“Likewise, not all trustees will call their adviser or accountant to let them know they have taken a small commutation which hampers real-time reporting. If the ATO [is] going to enforce the requirement for the trustee to report via [the] self-service portal, then I really hope that it is better than the myGov site which causes so much anguish for people using it at present.”
Wealth adviser at Skeggs Goldstien accounting, Adam Goldstien, also weighed in, saying the “difficulty” with real-time reporting lies in defining what the term actually means.
“The ATO have also indicated that they would be consulting with the industry, and hopefully during that period of consultation the professional bodies and the ATO would be able to define a real-time reporting regime that would be satisfactory to all concerned,” Mr Goldstien said.
Real-time reporting would cause further issues as “not all trustees proactively seek advice” from their accountants, making it “impossible for a professional adviser to report such things in a timely manner”, Mr Goldstien said.