Disqualification cheapest exit option for SMSF auditors under ASIC's new model
Under ASIC’s proposed and contentious new funding model, it’ll be cheaper for an SMSF auditor to be disqualified than to take appropriate steps in applying for deregistration.
Currently, there is no fee where an SMSF auditor makes a request for their registration to be cancelled, and there is no fee applied where an auditor is disqualified.
Under the new model, ASIC understands there will still be no fee where it cancels a registration or disqualifies an SMSF auditor for other administrative or disciplinary reasons.
However, the latest round of draft legislation has SMSF auditors paying $899 when they apply to exit the sector.
In effect, it’ll be cheaper for SMSF auditors to get disqualified by ASIC than it will be to terminate their own registration.
Disqualification comes with other costs, including reputational losses, referral to the Tax Practitioners Board, insurance implications and disciplinary action from an auditor’s professional body.
However, the costings structure highlights the flaws in what has so far been an unpopular round of fee proposals.
“I don’t know what they were thinking, it’s highly inappropriate,” CPA’s head of policy and corporate affairs, Paul Drum, told SMSF Adviser.
“It seems absurd that you’ve got to pay on the way out,” he said.
The legislation is still in draft mode, meaning the proposed fee structure may change again as a result of the consultation process. However, Mr Drum fears a federal government in “budget repair” mode will be tempted by this bottom-line boost.
“This is an easy way for them to claw in some extra revenue, even though the whole concept is inappropriate. It’s verging on absurd,” he said.
The draft legislation also proposes increasing SMSF auditor registration fees by about 18 times the current $107 fee to $1,927.
