Earlier this year, the government announced a 12-month amnesty period for historical underpayment of the superannuation guarantee, in anticipation of the full implementation of STP.
Under the proposal, an employer that has an SG shortfall amount in any period from 1 July 1992 up to 31 March 2018 has the ability to claim tax deductions in respect of SG charge payments made and contributions that offset the SG charge to the extent that the charge relates to the SG shortfall. In addition, the administrative component to the SG charge will not apply.
One of the key concerns that have been raised in regards to the measure is the fact it is supposed to apply from 24 May 2018, but is yet to be passed as law, said DBA Lawyers special counsel Bryce Figot.
Treasury Laws Amendment (2018 Superannuation Measures No. 1) Bill 2018 is currently before the Senate.
“It's not an amnesty yet, it's a possible future amnesty. I don't think this will happen or at least won't happen in its current form, because it is politically controversial,” said Mr Figot.
“It is an amnesty that might operate until May next year if it ever actually gets legislated, and that is by no means a guarantee.”
Mr Figot said Labor has made it clear they are “opposed to giving an amnesty to recalcitrant employers”.
With around 109 employers having already come forward under the SG amnesty, Mr Figot warned that if employers do come forward currently, there is “no specific legal right”, and it is technically just a voluntary disclosure at this point.
They should also bear in mind, he said, that the amnesty only covers SG, and people who fail to satisfy SG have a strong chance of also failing to satisfy other things such as state-based taxes.
“The federal commissioner has excellent data sharing with his state and territory counterparts. It's a two-way street, they both share information and they both use it for their respective revenue collecting purposes,” he said.
“So just bear in mind that there is a very strong chance that if you’re fessing up for SG, yet you haven't satisfied payroll tax, you might then get a knock at the door later.”
Impact on clients
As reported last week, some bookkeepers are finding clients are actively enquiring about the amnesty and are working under the assumption that it is now law.
“The SG amnesty still hasn't been passed, and yet we've got clients talking to us about different elements of it,” said Laurus Bookkeeping director Cassandra Scott.
“The ATO has been promulgating that quite heavily on their website, so we're caught between a rock and a hard place when it comes to advising our clients whether or not they should be trying to take advantage of the amnesty when the legislation has not even been passed.
“They are ready to take advantage of it, some are wanting to know more about it and what are the advantages of working with the amnesty and the main one is the tax deductibility of the payments, but as it stands, until legislation passes, anything that we offer to them in that space is purely speculative, because there is still no guarantee that the legislation is going to be passed.”