A crackdown by the Australian Taxation Office (ATO) on self-managed super funds (SMSFs) that have not yet lodged a 2009-10 tax return is inconsistent with the office’s own guidelines for non-compliance, according to the Small Independent Superannuation Funds Association (SISFA).
The ATO has been meeting with tax agents around the country and formally advising that SMSFs will be considered in breach of their compliance if returns aren’t lodged by 31 August or 30 September, according to SISFA.
SISFA chairman Michael Lorimer said for a super fund that only has its 2009 return outstanding at this stage, a threat of non-compliance if it doesn’t lodge by the end of August seems serious, but more importantly is inconsistent with the tax office’s own practice statement on the issue.
The ATO’s guidelines give an example of a non-compliant SMSF as one that failed to lodge a return for three consecutive years and disregarded repeated requests from the ATO, according to SISFA.
This is a vastly different situation to one where a fund was late lodging one return and had not received any further notices, Lorimer said.
“If you’ve got a public document out there that sets out the circumstances under which the tax office might consider a fund to be non-complying, then you’ve got this sort of approach, they seem to be at odds and for everyone in the industry as a practitioner, that’s a bit of a concern,” he said.
“You’d expect to be getting demand notices or phone calls but for one year’s worth of returns outstanding you wouldn’t be expecting to get a notice saying you might be getting taxed on half the assets in the fund.”
Lorimer stressed that SISFA was encouraging all SMSF administrators to lodge returns on time and said the industry needed to be vigilant in all areas of compliance, but added that the ATO’s approach in threatening funds with non-compliance just a few months after the deadline was comparable to cracking a walnut with a sledgehammer.
While there does not seem to be a method behind whether tax agents were being advised of a 31 August or 30 September deadline, from the cases seen by SISFA it appeared funds with a higher level of assets were more likely to receive the 31 August deadline, with 30 September for the rest, he said.
