Late lodgement rules point to sector-wide issues
The ATO’s move to suspend contributions and rollovers for SMSFs who lodge their annual returns late is understandable, given late lodgement is rife in the SMSF administration sector, according to SMSF Alliance.
The SMSF administrator’s principal, David Busoli, told SMSF Adviser that the new rules were an indication the ATO was “losing patience” with administrators who were not complying with their lodgement responsibilities, as many were lodging a significant proportion of their returns more than six months late.
“Some of the big administrators by 30 June had only lodged 60 per cent of their funds, and if you have a 60 per cent lodgement as at 30 June and they are supposed to be lodged six months before that, there is a problem,” Mr Busoli said.
“With the ATO turning a greater focus to this particular area, one would think it is a timely reminder that service providers need to get their act together and actually lodge on time.”
Mr Busoli said the ATO had already been suspending contributions for late-lodging funds prior to the new announcement, but that the two-week time frame would provide a more concrete deadline for administrators to work towards.
“This new approach does not mean you have to meet the absolute lodgement date because you can still get extensions, but you will have to meet the extended date,” he said.
Mr Busoli added that the move was likely to cause problems for rollovers in particular, given the complexity involved in the process.
“Where it will have an effect is where people are trying to roll over, because when you’ve gone through the process of the rollover and everything looks fine and then the institution checks and finds you are no longer on Super Fund Lookup, you may have to go back and redo the whole rollover process,” he said.
“The other thing I’ve discovered is that the reinstatement [of funds on SFLU] can take a little longer than the ATO has indicated, and that could cause further issues.”