New lodgement rules help accountants to chase up clients
New measures from the ATO to suspend contributions for SMSFs that lodge their annual returns more than two weeks late will be beneficial for accountants and administrators in helping them to chase up clients for information, according to Heffron SMSF Solutions.
In a recent blog post, the SMSF administrator’s managing director, Meg Heffron, said while the new deadline imposed by the ATO may seem extreme, it could help to incentivise less diligent clients to provide paperwork to their accountants in a timely fashion.
“While a two-week grace period does seem extremely harsh, there are some ways in which it is very beneficial to accountants and SMSF administrators who have trouble ‘encouraging’ recalcitrant trustees to respond to numerous requests for information,” Ms Heffron said.
“In a way, the ATO is voluntarily adopting the ‘bad cop’ role, meaning accountants and SMSF administrators don’t have to.”
Ms Heffron added that the ATO’s move to crack down on late lodgers made sense given that the office needed up-to-date statistics on SMSF holdings in order to properly regulate the sector.
“Without funds lodging what they are supposed to lodge when they are supposed to be lodging it, the ATO is flying blind,” she said.
“If we wish to continue the freedom to operate a dynamic and flexible SMSF environment without draconian regulation, we have to accept that the regulator needs information.
“Timely and accurate information also helps dispel myths peddled by those outside the SMSF sector about SMSFs being unregulated, irresponsibly run and ripe for fraud.”
However, Ms Heffron conceded that the new system was likely to cause problems for trustees relying on contributions or rollovers as part of a broader investment strategy, especially given the delays commonly experienced by funds waiting for the ATO to reinstate their complying status on Super Fund Lookup.
“While status will be returned to ‘complying’ when the return is lodged, historically in our experience this process can take six weeks,” she said.
“We are hopeful this may be improved by the fact the ATO will undertake their new process of removing/restoring complying status at the beginning of every month.”