ATO ramps up SMSF compliance scrutiny
The ATO has warned it is ramping up its scrutiny of SMSF compliance after it identified an increase in 2023 in the number of funds not meeting their obligations.
The regulator said that this year it has imposed a higher number of sanctions than in previous years including issuing an additional $29 million in income tax liabilities, administrative and tax shortfall penalties, and interest on SMSF trustees and/or members.
It has also disqualified 753 trustees who have now been added to its public register.
Compared to the 2022 income year, the ATO said these compliance actions resulted in double the amount of tax and penalties being imposed and more than triple the amount of disqualifications.
It continued that one of its main roles as the regulator of SMSFs is to assist trustees in complying with their obligations under the super laws and where they don’t, it will take appropriate compliance action.
“An important obligation a trustee has is to preserve their superannuation benefits until they meet a condition of release. They also need to ensure they get their fund audited and lodge the annual return each year,” it said in a statement.
It revealed the most common reason for applying the latest round of sanctions was to deal with SMSF members identified as having illegally accessed their superannuation benefits before meeting a condition of release.
Throughout the 2024 income year, the ATO said it will continue to take firm action against trustees who persistently fail to comply with their obligations and seriously breach the superannuation laws.
“If you are a trustee who has breached the superannuation laws, we recommend you rectify the contravention as soon as possible. Otherwise, you are putting your retirement savings and fund’s complying status at risk,” it stated.
It recommended that trustees should consider using the ATO SMSF early engagement and voluntary disclosure service and noted if trustees voluntarily disclose contraventions before an ATO audit is commenced, it will be taken into account when deciding what actions are needed.