ATO Introduces New “Stick”
The ATO has introduced a new incentive to encourage on-time lodgement of SMSF returns.
From 1 October 2019, if an SMSF is more than two weeks overdue on any annual return lodgment due date and hasn’t requested a lodgment deferral, the Fund’s status on Super Fund Lookup will be changed to ‘Regulation details removed’.
This will be assessed on the first business day of each month and will be applied to any fund that hasn’t lodged their SMSF annual return on time and are also more than two weeks overdue at that date.
When the outstanding return is subsequently lodged the SMSF will not be reinstated to ‘complying’ status until it is reassessed at the beginning of the next month.
So, what will this mean to the SMSF members?
- APRA funds won’t roll over any member benefits to the SMSF and
- employers won’t make any super guarantee contribution payments to the SMSF
Rollovers will be delayed but these are infrequent so probably won’t affect many members. The SGC issue is more problematic.
The ATO state that members should alert their employer to make any SG payments into the employer’s default super fund or a fund of the member’s choice. Once the SMSF’s status has been restored to ‘complying’ members can request a rollover to their SMSF of any member benefits that may be held outside their SMSF.
That seems an awful lot of bother. As an alternative, let’s just make sure the returns are lodged on time.