As of 22 April the ATO reported around 51 per cent of SMSFs had completed their annual return, for which the deadline is 15 May.
The ATO said there are also approximately 40,000 SMSF annual returns relating to the 2021 income year and 21,000 relating to the 2020 income year that remain outstanding.
It said trustees must arrange an audit for these income years and lodge the outstanding returns as soon as possible to avoid the imposition of penalties and other regulatory consequences such as the disqualification of SMSF trustees.
“SMSF trustees should have appointed an auditor by now to complete the 2022 audit in order to meet the lodgement deadline,” the ATO said.
“All SMSFs are required to have completed an audit for the 2022 income year by the 15 May 2023 which is the final lodgement due date for the 2022 annual return unless they have been granted a lodgement deferral. If the SMSF has no tax liability, they can be entitled to make use of the 5 June 2022 concessional date.”
Meg Heffron, managing director of Heffron, said the ATO has a dual role when it comes to SMSFs given it is the compliance regulator as well as the tax collector.
“That’s quite different to personal tax returns, company tax returns where the ATO’s main function is to make sure we pay the right amount of tax at the right time.
“Its role as the compliance regulator means the ATO is very focused on whether each and every fund is following the superannuation rules, not just the tax ones.
“Of course they rely on others like SMSF auditors to help them and auditors have a comprehensive set of requirements when it comes to reporting non-compliance to the ATO.”
She said that funds that lodge late in one year have a much shorter deadline the next year. For example, SMSFs with tax agents can usually lodge their 2021–22 annual return any time up to 15 May 2023. But any fund that lodged their 2020–21 late without being given an extension has a much earlier deadline for their 2021–22 return – 31 October 2022.
Fail to lodge an SAR on time and if it is more than two weeks overdue, the SMSF risks its compliance status being changed to ‘regulation details removed’.
If the status is ‘regulation details removed’ and the SAR is then lodged, the status will be updated to ‘complying’ on the first business day of the following month and made available on the following day.
In addition to changing the regulation details on Super Fund Lookup, it risks receiving failure to lodge penalties.
These numbers are appalling. Lodgement of returns is getting worse each year. For FY17 accounts the excuse was the introduction of TBC & CGT exemptions. The SMSF lodgements have then progressively worked. Covid19 was used as an excuse. Now accountants are blaming staff shortages.
I thought the tax agent code of conduct requires tax agents to have sufficient resources to meet their client lodgements.
It only going to get worse when the reality of a new tax sets in & there will be increased pressure to restructure before 2025. ATO & TPB need to take action now against firms that continually fail to achieve required targets.
This is mind-boggling stuff. After all the get tough talk from the ATO over recent years the sector has actually gone backwards. What’s the generic excuse this year? Staff shortages? Inflation? Maybe it’s time for APRA and ASIC to run this space and get some naming and shaming going. As an opening bid how about deregistering TANs with below benchmark % for current year and less than 100% for prior?
Why doesnt the ATO look at the reason why, rather than just use the threats of penalties as a big stick
Time for a change of attitude and rethink about the state of public accounting and lodgements