ATO, Compliance & Regulation

ATO imposes $3.4 million in fines

ATO SMSF penalties

Administrative penalties imposed on SMSF trustees by the ATO raised $3.4 million for the regulator in the 2022 income year.

The ATO has revealed the number of SMSF administrative penalties it imposed in the 2022 financial year amounted to a total of $3.4 million in fines.

The penalties included those for compliance breaches regarding issues such as trustees illegally accessing their superannuation benefits early, loans involving the SMSF and financial assistance provided to members.

The regulator released the data as part of its reminder to SMSF trustees that administrative penalties are one type of enforcement action available to it for common compliance breaches.

It noted there are several determining factors when establishing exactly how many penalty units are imposed on the trustees in question and demonstrated the potential severity of these penalties via an example.

“If the provision you contravened during the 2021/22 financial year was in relation to borrowings, we may apply a penalty of 60 penalty units and at $222 per unit this would result in you having to pay $13,320. This could be even more if there are multiple contraventions,” it said.

The sector watchdog also pointed out trustees should not consider administrative penalties as a mutually exclusive enforcement avenue available to it.

“Just because you receive an administrative penalty doesn’t mean we won’t undertake any other compliance action. You may also receive a notice of non-compliance or be disqualified as a trustee,” it stated.

It also took the opportunity to encourage SMSF trustees to use its voluntary disclosure service and make a plan to rectify any identified compliance breach to minimise any potential penalties that may arise as a result of the illegal action in question.

The reminder comes after the Albanese government included a measure in the October federal budget to increase the dollar amount charged for each administrative penalty unit from $222 to $275 from 1 January 2023.

Further, a 2022 Election Commitments Report indicated the government is planning for another increase in the penalty unit amount in 2023, with a projection this move will generate an estimated $44.1 million for the ATO by the 2026 income year.


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