PROPOSED CHANGE TO SIS REGULATIONS NOT SO TIMELY
23 November 2020
A proposed amendment to the Superannuation Industry (Supervision) Regulations 1994, is an inherently blunt instrument that is likely to be ineffective, difficult to administer and is likely to unfairly punish the wrong people, according to the Institute of Public Accountants (IPA).
In its submission to Treasury, on the Exposure Draft of the Treasury Laws Amendment (Miscellaneous and Technical Amendments) Regulations 2020, the IPA has questioned the proposed change requiring accounts and statements to be prepared at least 45 days before the day by which a return is required to be lodged for the entity. Currently, no timeframe is prescribed.
“The IPA does not support the change requiring accounts and statements be prepared at least 45 days in advance of the required lodgement date,” said IPA executive general manager advocacy & policy, Vicki Stylianou.
“Failure to comply with this proposed change could incur a fine of up to $2,220, which is a disproportionate penalty for SMSFs that have lodged a late return.
“A late lodgement may be an indicator of other compliance issues involving the SMSF and this measure will not address these issues.
“The IPA supports timely lodgements and appreciates that this measure attempts to align the requirement to prepare accounts with the latest date by which an auditor can be appointed. However, we believe that instead of encouraging early lodgement, it will place additional pressure on taxpayers and accountants, which may lead to the lodgement of inaccurate or incomplete submissions. This in turn will lead to more remission appeals, increasing the workload of the ATO.
“There are many other opportunities for the ATO to encourage timely lodgement including, being able to remove a fund from the Super Fund Lookup register; and disallowing employers from being able to make superannuation guarantee contributions for SMSF members.
“A key impediment to the 45 day deadline, is the practical reality of non-compliance for those funds having an earlier lodgement date of 31 October, not being able to prepare their accounts by mid-September as many of the managed funds that they rely on, do not publish their information until late September or early October. Newly established SMSFs and those funds that have lodged the annual return in the previous year will be disadvantaged.
“If such funds have investments in managed funds which do not report until the end of September, then the timeframe is totally unrealistic.
“We are unaware of any provisions in superannuation legislation that impose punitive measures for failure to comply with a requirement prior to the associated lodgement date. This proposed amendment would be creating new impositions above and beyond those linked with failure to comply with lodgement dates,” said Ms Stylianou.