ATO issues warning to late lodging SMSFs
The ATO has reminded SMSFs that their 2020-21 SMSF annual return should now be lodged unless they have received an extension.
In an online update, the ATO stated that SMSFs should be up to date with all their SMSF annual return lodgements, including their 2021 annual return, unless they have been granted an extension.
The ATO warned trustees that if their SMSF annual return is more than two weeks overdue, they will change the status of the SMSF on Super Fund Lookup to “Regulation details removed”.
“This status will remain until any overdue lodgements are brought up to date,” the Tax Office stated.
“If you have this status, APRA funds will not be able to roll over member benefits into the fund and employers are discouraged from making any super guarantee contributions to the fund. You also risk failure to lodge penalties.”
The ATO said that while running an SMSF can be time-consuming, keeping on top of lodgements is an important obligation for trustees.
“If you’re having difficulty preparing and lodging your SAR, contact us, or contact your registered tax agent. Your tax agent may be able to seek a deferral to lodge,” said the ATO.
The Tax Office also advised SMSFs that failure to lodge an SMSF annual return is a contravention and that they should use the SMSF early engagement and voluntary disclosure service to notify the ATO if there are any specific reasons as to why they cannot lodge.
“If you use this service, we will take your disclosure into account when determining any enforcement action,” it said.
Speaking at a Tax Institute conference in late May, ATO assistant commissioner, SMSF regulatory branch, Justin Micale said the non-lodgement of SMSF annual returns continued to be a big concern for the ATO, particularly with newer funds.
At the end of March, there were around 34,000 funds that had never lodged their first returns and a further 60,000 lapsed lodgers who had more than one outstanding return.
“We’ve found that when an SMSF has an unrectified regulatory contravention, it can be a pre-curser for failing to meet their lodgement obligations in subsequent reporting periods,” said Mr Micale.
“There’s been an alarming increase in the number of funds failing to lodge their first annual return and become what we call never lodgers. This is not a good start to their journey as an SMSF trustee, particularly as we issue letters specifically to these trustees to remind them of their first lodgement due date.”
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.