SMSF annual returns for 2020-21 have to be filed with the Tax Office unless the fund has received an extension.
ATO issues warning to late-lodging SMSFs
The ATO has warned SMSF trustees that they have to be up to date with all their annual return lodgements – including their 2021 annual return – unless they have been granted an extension.
If an SMSF annual return (SAR) was more than two weeks overdue the ATO would change the status of the fund on Super Fund Lookup to “Regulation details removed”.
“This status will remain until any overdue lodgements are brought up to date,” the Tax Office said.
“If you have this status, APRA funds will not be able to roll over member benefits into the fund and employers are discouraged from making any super guarantee contributions to the fund. You also risk failure to lodge penalties.”
The ATO said that while running an SMSF could be time-consuming, keeping on top of lodgements was an important obligation for trustees.
“If you’re having difficulty preparing and lodging your SAR, contact us, or contact your registered tax agent. Your tax agent may be able to seek a deferral to lodge,” said the ATO.
The Tax Office also advised SMSFs that failure to lodge a SAR was a contravention and that funds should use the early engagement and voluntary disclosure service to notify the ATO if there were any specific reasons why they could not lodge.
“If you use this service, we will take your disclosure into account when determining any enforcement action,” it said.
Speaking at a Tax Institute conference in late May, ATO assistant commissioner SMSF regulatory branch Justin Micale said the non-lodgement of SMSF annual returns continued to be a big concern for the ATO, particularly with newer funds.
At the end of March, there were around 34,000 funds that had failed to lodge their first return and a further 60,000 lapsed lodgers who had more than one outstanding return.
“We’ve found that when an SMSF has an unrectified regulatory contravention, it can be a [precursor] for failing to meet their lodgement obligations in subsequent reporting periods,” said Mr Micale.
“There’s been an alarming increase in the number of funds failing to lodge their first annual return and become what we call never-lodgers.
“This is not a good start to their journey as an SMSF trustee, particularly as we issue letters specifically to these trustees to remind them of their first lodgement due date.”