Earlier this week the government announced a raft of reforms to assist the ATO in cracking down on employer non-compliance with mandated superannuation obligations, including superannuation funds being required to report contributions received at least monthly to the ATO.
Speaking to Accountants Daily, The Tax Institute’s senior tax counsel Professor Robert Deutsch said that the proposal of monthly reporting would place a significant burden on accountants.
“These measures are likely to have some serious implications for accountants who act for a large number of small to medium-sized funds,” Prof Deutsch said.
“Imagine a firm which manages the affairs of 120 SMSFs needing to report in respect of each on a monthly basis. While each report might not be onerous, overall the incessant reporting is likely to be burdensome and expensive for such a firm.”
Prof Deutsch suggested that the ATO should consider a transition period to soften the blow to accountants.
“Perhaps there could be some compromise for at least a transition period whereby small funds (e.g. assets of less than $300,000 in value) can report quarterly until 30 June 2019 and then move to monthly thereafter,” he suggested.
“This would dovetail with the introduction of [single] touch payroll for small employers (20 or less employees) and would give accountants and clients time to gradually improve their reporting systems.”
The Institute of Public Accountants and BDO have both criticised the single touch payroll measure, which will further increase red tape for small businesses.
In the meantime, Prof Deutsch said it is crucial that accountants communicate to their clients the new measures and make a plan for how they will ensure the new requirements are met.
“Accountants will need to educate their clients about the need to provide timely information on a regular basis to enable the accountant to relay that information to the ATO,” Prof Deutsch said.
“It may be preferable to have the client forward the report to the ATO directly in some cases although this may lead to some confused channels of correspondence with some information coming to the ATO through the accountant and some coming directly from the client.”
The Tax Institute is also concerned that the ATO will not have sufficient resources to effectively utilise the influx of data that will come with this initiative and may not be able to follow up on non-complying employers.
“While it is all well and good that the ATO is given super guarantee data in a timely manner, the benefits will only arise if the ATO can and does put the data to good use,” Prof Deutsch said.
“We query whether this initiative will actually force non-complying employers to comply with their super guarantee obligations. We fear it may simply impose further obligations on already compliant funds.”