As part of its submission in response to the ATO’s consultation on events-based reporting, the SMSF Association recently undertook a survey of its members. The SMSF Association largely consists of financial planners and accountants who practice SMSF advice.
The survey indicated that less than half of the respondents in the survey are currently ready for the ATO’s introduction of events-based reporting and that less than half are satisfied with the intended start time.
The results also showed that only half of the respondents understand the intent and what is required to satisfy the ATO’s event-based reporting.
“There is general concern about SMSF advisers’ ability to cope with the significant amount of changes in the superannuation environment and increased costs for clients driven by extra requirements,” the submission said.
DBA Lawyers special counsel Rebecca James also recently raised concerns that there will be a huge amount of data going to the ATO once events-based reporting commences, particularly in relation to pension commencements and partial commutations of pensions.
“Hopefully the ATO’s systems will be up to scratch to be able to handle the volume of reporting,” Ms James said.
“I don’t know what the ATO will do with all this information and whether it will be dealt with on a timely basis. It will be interesting to see to what extent they’re building systems to be able to deal with this, and what they’re going to do with all the information.”
The SMSF Association said it supported the second option suggested by the ATO in its position paper on events-based reporting, as this would allow for a smoother transition.
“Trustees and their advisers will have more time to ensure their reporting obligations are met after a relevant transfer balance cap has occurred,” said the submission.
The results from the member survey indicated that 90 per cent of members surveyed supported option 2 in the ATO’s position paper.
Under option 2, from 1 July 2018, SMSFs will have 28 days after the end of the relevant quarter to report all transfer balance cap events except commutation authorities and commutations after an excess transfer balance tax determination.
After an agreed upon transitional period, SMSFs will then be required to report all events monthly, the submission explained.
The SMSF Association through its submission also proposed that the ATO considers looking into the feasibility of amending the requirement for the proposed transitional period.
“For example, members with a total superannuation balance below $1 million could be carved out of reporting until 1 July 2020 (the end of quarterly transition period),” the submission said.
The SMSF Association said this would have the added benefits of reducing the compliance strain on SMSF trustees and advisers in the immediate future and also reduce any revenue leakage from SMSFs.
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia and has reported extensively on technical strategy and legislative updates. Miranda has also directed SMSF Adviser's print publication for several years.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.