The ATO has recently announced increased consequences for SMSFs who are late in lodging their annual returns (tax returns).
Effective 1 October, an SMSF more than two weeks overdue have had their regulation details removed from Super Fund Lookup.
Why is this a big deal?
Super Fund Lookup is the mechanism that allows SuperStream to work, impacting the capacity to receive employer contributions.
An SMSF with their “regulation details removed” is unable to receive superannuation contributions via SuperStream. This will cause many SMSF members to have default super fund accounts opened as a result of their tardiness on lodgement.
This can result in duplicate accounts, additional costs and increased hassles.
This also impacts a superannuation funds ability to receive a rollover from an APRA Fund.
The ATO have stated that funds who have requested lodgement extension will not be affected by this.
Once lodgement has occurred, it may take up to a month for the regulation details to be reinstated.
Late lodgement past deadlines (e.g. 31 October, 28 February, 15 May) may mean that your clients SMSFs will have their regulation details removed and put at risk the capacity to receive contributions.
This may be magnified with the 15 May deadline as these consequences, and the timeframes from the ATO, will likely mean that a late-lodging fund will have their details removed as the end of financial year approaches – which may cause issues for contribution strategies to be employed.
It may be naïve to believe that we will receive 100% lodgement on time, but clear communication with both clients and the ATO will help ensure that unnecessary superannuation accounts are not opened (via default super funds), and to ensure the smooth passage of superannuation contributions during the financial year to help clients stay within their annual contribution caps.
Act now with your clients.
For more information call us on 03 9886 0800 or email us at firstname.lastname@example.org.
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Disclaimer: The information contained is general in nature. Professional advice should be sought before acting on any aspect on this page.