Practitioners have been urged to tread cautiously when advising clients on whether they should wait for the superannuation guarantee amnesty, warning that they could face the “full force of the law” if they undergo an audit.
Accountants warned on SG amnesty approach
Earlier this year, the government announced a 12-month amnesty period for the 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.
The amnesty will be available from 24 May 2018 to 23 May 2019, but legislation has yet to be passed, with the ATO confirming that the benefits are not yet in effect.
Speaking to Accountants Daily, Institute of Public Accountants (IPA) general manager of technical policy, Tony Greco, said he understood the dilemma that accountants were facing in advising clients on their next step but said there was a case to consider making a voluntary disclosure.
“At the end of the day, if you have an SG obligation and you get caught up in audit activity, you’re going to face the full penalty regime so that is the issue is if you wait,” said Mr Greco.
“It is an obligation you have to meet anyway so the ATO can apply a reduction in penalties if you make a voluntary disclosure so the worst case scenario is you miss out on some of the extra goodies but the alternative is if you get caught out by some audit activity – for example, a past employee makes a complaint –then you’re going to get the worst of both worlds.
“That’s the quandary and it’s rare to have this quandary where an amnesty is started or announced and then the law doesn’t give it its force so it is an unfortunate set of circumstances.”
With the introduction of Single Touch Payroll to employers with 20 or more employees this year and the proposed rollout out to smaller businesses next year, Mr Greco believes there will be little room for employers to hide.
“The transparency aspect is a missing link at the moment with no visibility from the ATO as to when these payments occur but when STP becomes fully operational, it will be harder for employers to dodge that bullet,” he said.