Speaking to SMSF Adviser, BDO partner, superannuation, Shirley Schaefer said that in the past few months, the ATO has been much more active in terms of removing registration details from Super Fund Lookup where the fund has more than two years of late lodgements outstanding.
Where this occurs, it can make things very difficult for the client, Ms Schaefer said.
“All of a sudden they won’t be able to get SuperStream contributions through or clearing house contributions through or rollovers done, particularly where they’re rolling in or out of an APRA-regulated fund,” she said.
Once the lodgements are brought back up to date, it will still take a minimum of 21 days for the fund’s registration details to be put back up, she said, which can be problematic for funds that already have transactions pending.
“They’ve certainly been a lot more active around this than they have been in the past, and I suspect that will continue,” she said.
The ATO has been closely monitoring the late lodgement of SMSF returns for a number of years, warning SMSFs back in 2014 that it would be taking action against funds with two or more years’ worth of overdue returns.
Since the launch of its non-lodgement program last year, the ATO has seen a reduction in the number of non-lodgers across the SMSF population, with the number of overdue lodgers falling from 87,000 down to 66,000 in February this year.
The ATO has had a strong focus on SMSF professionals that have fallen behind on their obligations in particular, with the Tax Office taking action against hundreds or tax agents and SMSF auditors outstanding SMSF returns.
Last month, ATO assistant commissioner Dana Fleming said following the ATO’s activity in this area, over 1,000 late returns were lodged by tax agents.
I have a situation where we received the ATO letter (in April) threatening removal of clients details from Super lookup if the 2017 return was not lodged by 3rd May (note, only two years outstanding not “more than two” as mentioned above). The 2017 financials had been sat on the auditors desk for about 5 months. Finally lodged the return mid May (a week after the due date on the letter). Client called me last week to say their employer cannot pay SG into their SMSF. I called the ATO (it had been longer than 21 days since lodgement) and was informed Super lookup will not update until 21 days after ALL outstanding returns have been lodged. The 2018 return (not lodged) was due 31 October. No letter received about 2018. Only one year now outstanding.