Earlier this week, ATO deputy commissioner James O’Halloran announced the agency’s new focus on SG obligations in the wake of its “unprecedented level of visibility” of super information at the account and transaction level.
The ATO has attributed the increased in data visibility to the introduction of Single Touch Payroll (STP) reporting and improvements in super funds’ reporting through the Member Account Transaction Service (MATS).
These two measures will allow the Tax Office to cross-reference employer information from STP with the superannuation fund data from MATS, identifying gaps between what employers say they are contributing and what they are actually paying.
SuperConcepts executive manager Philip La Greca believes SMSFs are the last piece of the puzzle, with the ATO set to target the sector next.
“As part of the push for integrity and accuracy for the wider superannuation system, somehow SMSFs will need to be brought into the fold,” Mr La Greca said.
“This can either be by a blanket requirement for more frequent electronic reporting to the ATO, or a more targeted approach where electronic reporting becomes a mandatory requirement of any superannuation fund wishing to accept superannuation guarantee contributions or pay a retirement income stream.”
Mr La Greca believes employers and practitioners will have their work cut out for them once the ATO turns its attention on SMSFs.
“Employers will be put between a rock and hard place because they’ve made the contribution to an SMSF but there’s no matching information at the ATO of the contribution being received by a fund,” Mr La Greca said.
“And this could trigger additional work for the employer in having to respond when they have actually met their SG obligation.
“Trustees and practitioners are well advised to start ensuring you have the right kind of future-proofed support to meet regulatory needs. This involves a combination of software with automation and data feeds and administration capabilities that allow real-time reporting to the ATO for when the spotlight is eventually turned to the SMSF sector.
“Either way, the days of annual reporting in arrears seem numbered as SMSFs will need to advance towards providing reporting mechanisms in line with ATO requirements.”
Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.