Avoid ATO Penalties And Ensure Your ATO Obligations Are Lodged On Time

By Daniel Clements

28 March 2020

It is a legal requirement for SMSF Trustees to ensure financial statements are audited and tax returns lodged with the ATO by the respective due date every year. Recently the ATO announced a crackdown on SMSF tax returns that become overdue in an attempt to encourage on-time lodgement and ultimately to protect retirement savings.

An important date is looming for Self-Managed Super Funds (SMSFs) – 15 May. Not only is this the day that the 30 June 2019 tax return is due for lodgement (so long as you are not already behind) but for SMSFs that lodge their transfer balance account reports (TBAR) annually, the report is due on the same day as the annual return. An exception to this is if you had a newly registered SMSF during the 30 June 2019 year, then your tax return lodgement date is 28 February.

DATES TO REMEMBER

WHAT

15 May 2020

Due date for the 30 June 2019 Tax Return Lodgement.

Due date for transfer balance account report (TBAR) for SMSFs with annual TBAR reporting obligations.

28 February

Due date for Tax Return Lodgement for newly registered SMSFs during the 30 June 2019 year.

 

The ATO considers non-lodgement a strong indicator that the retirement savings of SMSF members may be at risk. For example:

  • SMSFs that have trouble with their first lodgement often continue to struggle to meet their compliance obligations.
  • Trustees who have been complying, tend to stop lodging when they encounter administrative or regulatory issues. Once they stop lodging, they often don’t get back on track, creating a snowball effect.
  • Non-lodgement in the first year of registration is a strong indicator to the ATO of the potential of illegal early release of benefits.

If an SMSF tax return for 30 June 2019 and/or prior years is outstanding for more than 14 days, the ATO will now remove the SMSF’s compliance status from Super Fund Lookup. This status will remain until any overdue lodgements have been brought up to date.

Once a fund’s compliance status is removed, it is unable to receive super guarantee contributions from employers or rollover benefits from other superannuation funds. Employers will need to direct super guarantee contributions to the employer’s default super fund or another complying fund and you will then have to roll the balance over to your SMSF once the complying status has been restored.

SMSF trustees can avoid their SMSF status changing to “regulation details removed” by having their financial statements completed and audited and the tax return lodged before the lodgement due date. Some key tips to help on time lodgement include:

  • Prepare minutes outlining investment decisions;
  • Organise market valuations for unlisted assets;
  • Keep detailed records of SMSF bank account transactions;
  • Hold onto any rollover statements or important investment documents that you may have received; and
  • Provide your fund administrator with the required information well before the lodgement due date.

If a lodgement may be late, SMSF trustees should work with their administrator to seek a deferral to lodge before the due date. This will ensure that their SMSF status remains ‘complying’. 

Have you lodged your SMSF tax return yet?