an increase in late lodgement, with 10 per cent of SMSFs having an outstanding lodgement for a particular year, while the number of private super funds having failed to lodge a return after registering stood at 23,000, data issued by the ATO showed.
According to the superannuation national leader for BDO Australia, Paul Rafton, late lodgement is one factor which may trigger an investigation by the ATO. “The ATO tends to focus on those that are late, or have a late lodgement history because it is of the view that they are late lodging for an unfavourable reason,” he said.
This is owing to growing concerns that fraudster are looking for new ways to extort money from over one million scheme members, as investors have become more vulnerable amid the pandemic as a result of loss of income and increased financial pressure. According to the Australian Competition and Consumer Commission, an estimated $851 million lost to scams in 2020 involved investment products.
While Rafton recommends avoiding falling for illegal early access schemes by relying on professional advice, he also advises an early engagement with the ATO, in the event that a mistake does occur in order to mitigate penalties and interest and to expedite remedial action. “Where mistakes do happen, early engagements with the ATO will be the best approach for SMSF trustees,” he said. “It’s better to go to the ATO before it comes to you. You need to have a plan on how you are going to resolve it and make some undertakings that you’ll never do that again.”
Other recommendations to ensure your SMSF is compliant include the lodging of income tax returns on time and avoiding calculation errors and misreporting with SMSF annual returns. Experts also advise investors to ensure all assets are revalued to market value before starting a pension, while it is also necessary to have a prudent investment strategy and ensure all investment decisions are consistent with it. Keeping all documents used to prepare the SMSF’s annual return is also a key recommendation, while advisers are trustees are advised to keep their personal business assets separate from SMSF assets.
