Thinking | 30 March 2020

SUPER GUARANTEE AMNESTY – WHAT YOU REALLY NEED TO KNOW

For details of the eligibility requirements and concessions provided under the superannuation guarantee amnesty amnesty, which ends on 7 September 2020, refer to our article Super guarantee amnesty – act now before it is too late!

The ATO has recently provided further insights into how it will apply this amnesty. These details are discussed below.

The ATO will go back as far as they please

If an employer’s records don’t go beyond the five-year record keeping period, their amnesty disclosures may be limited to that period – you can’t disclose what you don’t know.

However, shortfalls that are not disclosed will not get amnesty protection and the ATO is not limited to considering this five-year window - they can go back to 1992 if they want!  And they will go beyond your records to consider third party information including bank records, employment contracts, workplace or enterprise agreements and awards.

If you are making a disclosure under the amnesty, you must be able to honestly say that you have considered all past periods to the best of your ability and have not been able to identify any historical shortfalls.  If it is clear that you may have undisclosed historical shortfalls, expect the ATO to dig deeper – they are not beholden to your request to stop at five years.

Once the ATO commences an audit, they can expand it beyond its original scope to consider all aspects of your tax compliance.  When it comes to the ATO, prevention is always better (and cheaper) than a cure.

No COVID-19 concessions

Despite the severe financial pressure employers are feeling at the moment as a result of the COVID-19 pandemic, no concessions are being provided in relation to superannuation guarantee obligations.

A failure to make the required minimum contributions by the statutory date will automatically produce a superannuation guarantee charge liability (and give rise to potential penalties).  Without a change to the legislation, the ATO has no discretion to defer or waive these obligations.

In the current climate, you should expect employees to closely scrutinise their entitlements.  The media is already highlighting to employees where they can look to recover money in these times and this includes superannuation, PAYG withholding and checking their employee entitlements with the Fair Work Ombudsman.

Once businesses have navigated the immediate challenges of the current climate, it would be prudent to review and consider past superannuation compliance and if appropriate, take advantage of the superannuation guarantee amnesty. Keep in mind that disclosures must be made by 7 September 2020 and payments of superannuation guarantee charge will only be deductible if they are made by that date.

Contact Andrew O’Bryan or Melinda Bell if you wish to discuss the amnesty.

Contact

Andrew O’Bryan

Andrew specialises in taxation law. He is a CPA Australia Fellow and Chairman of its Taxation Centre of Excellence.

Todd Bromwich

Todd is a taxation lawyer with experience in charity law, general commercial matters, trust law and estate planning.

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