ATO client engagement director Dalila Vellotti has confirmed some important details on when SMSFs who are currently annual reporters will need to report events from the 2022–23 income year once they move into the new framework.
The ATO announced in late June that from 1 July 2023, transfer balance account reporting (TBAR) for SMSFs will be streamlined, with all SMSFs being required to report an event 28 days after the end of the quarter in which an event occurred.
Speaking in the SMSF Adviser Show podcast this week, Ms Vellotti gave an example of an individual who starts a pension on 1 July 2022 this year who is in an SMSF where all members had a total super balance under $1 million last financial year.
“Under the current reporting arrangements, they would be eligible for annual reporting and they wouldn’t have to lodge their TBAR until they lodged their annual return which could potentially be May 2023 with the extended lodgment period,” said Ms Vellotti.
However, once the new reporting framework commences on 1 July 2024, Ms Vellotti said this annual concession will no longer be available.
“What this means is that from 1 July all events must be reported, being all unreported events, on a quarterly basis. This means that if there are any unreported events up to 30 September, they must be reported by 28 October 2023,” she explained.
Ms Vellotti confirmed that the SMSF member in the example would therefore need to report the commencement of the pension on 1 July 2022 by 28 October 2023 at the very latest.
“Once that period starts, anything that’s unreported needs to be reported,” she said.
“That will reduce a lot of the complexity and it’s intended to be very straightforward.”
The 1 July 2023 start date effectively provides SMSFs and SMSF professionals a year to prepare for quarterly based reporting, she noted.
“So, it’s not a case of ‘well I’ve got the annual concession, I can just rely on that’. You need to get all your reporting up to date so that you’re able to report quarterly from 1 July,” she warned.
“Its not dependent on when the event happened, its dependent on the concession.”
Ms Vellotti said the ATO is encouraging the practitioners to identify which clients will be impacted and let them know about the change.
“Get your reporting in as soon as possible. Don’t leave it [until] the last moment,” she cautioned.
What is the benefit of this? Cost far exceeds benefits – regulation for regulation sake.
What an absolute joke. We’ve got enough pressure as it is to get work done, yet alone keep up to date with this ridiculous deadline.
“That will reduce a lot of the complexity and it’s intended to be very straightforward.” This statement is proof that the ATO has no idea how SMSFs or accounting firms work. The ATO is completely out of touch.