Recent ATO data provided to SMSF Adviser indicates that just over 80 per cent of SMSFs have now lodged their return for the 2020–21 financial year as of 23 June 2022.
The ATO noted that a number of SMSFs have applied for deferrals, with lodgements expected to increase over the coming months.
There is currently over 138,000 lapsed lodgers with one or more outstanding SMSF returns, according to the ATO data.
The ATO warned that lapsed lodgements for an SMSF can signify “breaches of regulatory rules or illegal early release of funds”.
There has, however, been an improvement in the number of SMSF lodging their first return.
There is currently around 26,000 funds that have never lodged their first SMSF return. In late March, ATO assistant commissioner – SMSF regulatory branch, Justin Micale, reported that 34,000 SMSFs had never lodged their first return.
The ATO warned that where trustees have failed to lodge their first SMSF return, this signifies a risk that “trustees may have illegally accessed their superannuation which may to significant tax consequences and penalties”.
“It is important that SMSFs lodge their audited annual returns on time or seek a deferral from the ATO if they need additional time, to avoid unnecessary follow up,” the ATO stated.
“Lodging an annual return is a fundamental obligation of running your own super fund, and SMSFs who fail to do so are not only breaching their obligations as a trustee but are likely to trigger interest from the ATO.”
Mr Micale said in late March that lodgment of SMSF returns remains a significant priority for the ATO.
“We have a comprehensive communication program in place to remind trustees of their lodgment requirements, including targeted mail-outs for those new to the system and those that have failed to meet a due date,” he said.
“While this approach does deliver positive results for the majority of trustees, there remains a persistent group who continue to ignore our reminders so we’re now targeting them with a compliance campaign called three strikes and you’re out.”
I reckon most of the SMSFs that have never lodged a return are ‘failure to launch’ ones, rather than something more sinister like illegal early release.
I am looking forward to the ATO deregistering a whole chunk of SMSFs like they did in 2017-18 so people can start writing obituaries for the SMSF sector. Again.
Dear ATO, when you actually have time to calculate the number of late lodgement, please DO SOMETHING to resolve the backlog!
I wrote about this topic a year ago.the ato have made funds go to external auditors rather than internal auditors,in our experience its adding two weeks to the completition.thats the main issue why they’re late this year.
Agreed
All the accountants who’ve been using independent external auditors for years always plan for 1-2 weeks for audit turnaround. Yes moving to a new auditor is painful in that first year (I know – I’ve done it with many hundreds of clients) but it has to be done.
If an accountant doesn’t have the capacity to get SMSF returns lodged on time (even after extensions) then do something about it!
Whether it’s outsourcing, not taking on more SMSF clients or jettisoning recalcitrant SMSF clients who don’t give you what you need.
Yes, it’s hard, but most things worth doing normally are.
Maybe if the ATO actually processed the Return Not Necessary requests (first-year lodgers) on time they’d have more accurate figures.
I guess the ATO is to be blamed for their incompetence in relation to first year SMSF lodgment. I have had four first year lodgement case that needed to be a nil return. I gave them bank statements showing nil balance at the end of the financial year. This is sufficient enough to make it nil lodgement. I submitted request that these four cases be lodged as nil return in November 2021 but they left it toward the end of February and on top of that, they rejected it with a reason saying that there has to be some deposit into the account. Their reasoning is NOT acceptable as I have provided evidence as per guideline. So who is right????
The ATO need to pull up their soxes and stop being rigid!
My favourite is when you provide an RNN with a bank statement showing a deposit [i]after[/i] 30 June 2021 and they reject it saying “appropriate evidence not provided”.
With your other issue, the ATO is right. If the SMSF was registered before 30 June 2021 and is still sitting there [b]today[/b] with no assets, then either the members need to make a contribution in the SMSF bank account OR cancel the registration.
Remember there is there a question on the SMSF ABN application asking [i]”Does the entity hold any assets, either tangible or intangible?”[/i] You have to answer “YES” on the application to continue.
We are fortunate we have the RNN option for newly registered SMSFs.
The ATO needs to understand that the accounting profession is struggling to meet deadlines. A blanket extension to 30/9/22 would allow us to catch up. We are buried alive with silly letters from the ATO killing trees!