By Lowe Lippmann Chartered Accountants
•
04 Dec, 2022
ATO warning to SMSFs: "Paying the price for non-compliance" There are various courses of action available to the ATO when trustees of self-managed super funds ( SMSFs ) have not complied with the super laws, including applying administrative penalties. A number of factors determine the amount of the administrative penalty, including: the type of contravention; when it occurred; and the number of penalty units that apply. For example, if an SMSF contravenes a provision in relation to borrowings during the 2021/22 financial year, the ATO may apply a penalty of 60 penalty units and, at $222 per unit for that year, this would result in the SMSF trustee having to pay $13,320. This could be even more if there are multiple contraventions. We note that the Government recently introduced a Bill to Parliament to increase the value of a penalty unit for Commonwealth offences committed on or after 1 January 2023 from $222 to $275, which may make an SMSF trustee exposed to an even larger amount after 1 January 2023. The ATO imposed total administrative penalties of around $3.4 million on SMSF trustees last year for contraventions such as trustees illegally accessing super benefits, loans, or financial assistance given to members. Also, just because a trustee receives an administrative penalty doesn’t mean the ATO won't undertake any other compliance action, such as issuing a notice of non-compliance or disqualifying the relevant entity as a trustee.