A technical expert has told SMSFs to monitor whether administration costs are raised due to events-based reporting especially among administrators that are not fully automated.
“I’ve been asked the question as to whether administrators will charge for the additional information that needs to be reported to the ATO because it’s separate from the income tax return and compliance return,” SuperConcepts SMSF technical and private wealth executive manager Graeme Colley said.
“So there are concerns about whether the administrator will add to the cost of the administration of the fund. And the answer I’ve got is that it depends.”
Colley said some administrators could increase their costs as a result of the transfer balance account report (TBAR) regime.
“I know we [SuperConcepts], and a number of others, are not going to do that because we see TBAR as part of the administration service we provide, but there are some others who may not have access to automatic administration systems, which means they may end up filling out those TBAR forms manually and this will take additional time, so they may include an additional cost,” he warned.
“But I think what you’ll find is that because of the competitive pressure on the SMSF administrators at the moment, you may be lucky [and not] see any increase in the cost of that administration service for TBAR.
“We have to pick up our game a bit to make sure reporting to the ATO helps with more timely administration of the fund – and that’s not criticism, it’s just the way the industry is moving.”
Earlier this year, the ATO revealed SMSFs have already been using the TBAR to inform the regulator of events affecting their transfer balance cap and total super balance, with the system so far working well.
“Some SMSFs have already started reporting earlier and there have been no issues in receiving those forms and for the reporting to happen,” ATO SMSF segment assistant commissioner Kasey Macfarlane told selfmanagedsuper.