ATO & Superannuation
Self Managed Superannuation Funds Under the Microscope
In Australia, Self Managed Superannuation Funds (SMSF) account for 31% of the total superannuation assets with nearly one million (8% of total super members) members. The ATO has encountered some common problems in its audits in previous years including:
- Loans and borrowings;
- In-house assets;
- Not investing at arm’s length;
- Acquisitions from related parties;
- Lack of separation of assets;
- Sole purpose breaches.
The ATO will be reviewing every fund reported to it by approved SMSF auditors and last year 150 funds were declared non-compliant and 440 people were disqualified from being a trustee.
Penalties for SMSF Trustees
The Government has approved administrative penalties applicable from 1st July 2014 to breaches of the superannuation laws, with particular impact on trustees of SMSFs who will be personally liable for penalties ranging from $850 up to $10,200 depending on the contravention. The fund cannot pay the penalty as the trustee is personally liable. Existing arrangements which contravene super law will also come under the new penalty regime so trustees need to rectify any contraventions as soon as possible to avoid the penalties. An example would be a loan to a member or relative which occurred before and still exists after the 1st July, 2014. Each individual trustee in this case would incur and be personally liable for a $10,200 penalty. Such a loan would need to be repaid to the fund as soon as possible with commercial interest.
Super Obligations Industries at High Risk
Employers in the following industries have been identified by the ATO as having a higher risk of not meeting their superannuation obligations:
- Beauty Industry and Hairdressing
- Clothing Retailers
- Management Advice and Consulting.
Click HERE to download the full edition of The Business Accelerator Magazine for June 2014.
Other articles in this edition:
- 2014 Individual Tax Return Checklist
- 2014 Companies, Partnerships, Trusts & Other Business Tax Checklist
- 2014/15 Budget Overview
- Personal Taxation - 2014
- Budget Changes For Business
- Superannuation & Retirement Changes
- Business Start Up Corner - Thinking Of Starting A Business?
- Where There's A Will...
- Claiming Travel Between Home & Work
- What's A Business Worth?
- Why Your Business Needs To Be Google Friendly
- Mobile Money
- Reading Corner - The E-Myth Revisted
- One Stop Shops For Social Media
- Tech Corner - Parking Maestro
- A Minute On Marketing - 7 Killer Marketing Words