The ATO has expressed its frustration with the current state of SMSF annual return (SAR) lodgement practices and consequently has issued a firm warning to the entire sector about this matter.
“I remain concerned about the worrying trend of SMSF trustees who simply do not appear to be taking their annual return lodgement obligations seriously. So I am putting the SMSF community on notice. We are losing our patience with non-lodgers,” ATO SMSF segment acting assistant commissioner Stephen Keating told delegates at the 2020 SMSF Trustee Empowerment Day hosted by smstrusteenews.
“Failing to lodge is a clear breach of the SISA (Superannuation Industry (Supervision) Act), is a fact that is easily proved and is the most obvious sign to us that an SMSF is no longer complying with its obligations.
“The ATO is committed to following up SMSF trustees that have overdue SARs and my clear warning to SMSF trustees is do not ignore our attempts to engage with them to resolve their overdue returns.
“If they do ignore us, they will face significant enforcement sanctions that will include the ATO issuing a notice of non-compliance against their SMSF and/or the disqualification of trustees.”
The warning comes amid poor SAR lodgement results for the 2019 financial year, despite extending the deadline for furnishing the document to 30 June 2020 as a conciliatory measure in light of the bushfires experienced earlier in the year and the current coronavirus pandemic.
According to the latest ATO figures, only 80 per cent of 2019 annual returns have been lodged.
Keating acknowledged the shift in priorities for most people due to COVID-19 is a contributing factor to this situation, but reiterated the regulator wanted rectifying action to take place.
“I encourage all industry professionals, who support the review, to review their client list and reach out and nudge any of their SMSF clients who haven’t yet lodged their 2019 SAR,” he said.
The ATO has already taken other steps to improve timely SAR lodgement, such as changing the status of tardy SMSF lodgers on its Super Fund Lookup facility.