SuperConcepts general manager of technical services and education Peter Burgess has said that the ATO is giving consideration to a further transition for some clients for events-based reporting, where their balance is well below $1.6 million.
Based on a speech by ATO assistant commissioner Kasey Macfarlane at the Chartered Accountants Australia and New Zealand conference, Mr Burgess said this is something the ATO is currently thinking about and will be making some announcements over the next few weeks.
“What I think [they mean], is that if you’ve got less than $1 million, for example, then you won’t have to report as frequently, or you won’t have to report by the same time frames,” said Mr Burgess.
“Now I can understand why they’d doing that but I’d just be concerned that’s introducing some complexity. Whenever you bring in a balance threshold, like this, it typically adds to complexity.”
In a recent submission to the ATO’s position paper on events-based reporting, the SMSF Association made a similar proposal, suggesting that members with total superannuation balances below $1 million should be carved out of reporting until 1 July 2020.
The SMSF Association said this would have the “added benefits of reducing the compliance strain on SMSF trustees and advisers in the immediate future and also reduce any revenue leakage from SMSFs”.
SMSF software provider BGL has also been critical of the requirement for lower balance super funds to comply with events-based reporting.
“[The ATO] is asking every single person in Australia to lodge pension information. So if you’ve got a pension where your balance is only $100,000, you’ve still got to lodge pension information with the ATO,” said BGL managing director Ron Lesh.
“Really this is just overkill – big brother really does seem to have gone mad.”
While all the concerns sound logical, it does throw a problem into pond. Imagine the situation where an individual has 4 different super funds, each with $500K. All are well below the stated $1M, so deferred reporting, but the total is in excess of the $1.6million cap. If you bring in escape options, you bring in loop-holes.
Got to agree with SMSFA and BGL on this one. Why should the bulk of members need to report to capture information from those at or near the $1.6m limit. The ATO and Government should be looking to help reduce costs not increase them.