Superannuation

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July 9, 2021

Super(annuation) Blog

Jason Williams

Business Sherpa

Do you have some outstanding superannuation guarantee (SG) payments for your employees for the period 1 July 1992 to 31 March 2018? Read on.

SUPERANNUATION GUARANTEE AMNESTY

Do you have some outstanding superannuation guarantee (SG) payments for your employees for the period 1 July 1992 to 31 March 2018? Read on.  

The on-again-off-again, superannuation guarantee amnesty is on-again.

Originally announced back in May 2018, it was reintroduced in September 2019 and finally become law in March 2020; a month when not much else was happening. Yep.

So what is this amnesty thing all about?

In short, the amnesty allows employers to disclose and pay previously unpaid Super Guarantee Charge (SGC), plus nominal interest, for the quarters beginning 1 July 1992 through to 31 March 2018, without incurring hefty penalties, and to claim a tax deduction for the payments made up to 7 September 2020.

The amnesty does not cover unpaid amount arising after 31 March 2018.

Critically, employers must apply for the amnesty by 7 September 2020 and pay any amount by this date to gain a tax deduction.

At this stage, there are no provisions in the law for an extension of time for lodgement post 7 September 2020; however, the ATO will allow for an extension of time for payment. The catch is that only payments made before 7 September 2020 will be tax-deductible, and if you enter a payment plan and miss a payment, you will be disqualified from the amnesty.

SO WHY ACT NOW? WHAT IF I DON'T APPLY?

If you do not act now and apply, and the ATO identifies you before you come forward, you will no longer be eligible for the benefits of the amnesty. And when the ATO says "no longer" they mean you will cop hefty penalties.  

What are the penalties for non-compliance?

  • SG shortfall
  • nominal interest (10%)
  • administration component ($20 per employee per quarter)
  • Part 7 penalty (up to 200% of the SGC)

Additionally, payments of the SGC won't be tax-deductible.

We highly recommended that you deal with all unpaid amounts before 7 September 2020, including those that relate to post 31 March 2018, particularly as the introduction of Single Touch Payroll (STP) now allows the ATO to identify non-compliance quickly and accurately.

WHAT DO I NEED TO DO?

  1. Jump on here to see if you have been paying the correct SGC – https://www.ato.gov.au/Calculators-and-tools/Super-guarantee-contributions/?page=1#Employers
  1. If you have a shortfall, download the application https://www.ato.gov.au/uploadedFiles/Content/SPR/downloads/SG_Amnesty_form_2020.xls
  1. Complete one form per quarter using the instructions contained in the form
  1. Check the amounts are correct and there are no errors on your form
  1. Complete the declaration to confirm you are applying for the amnesty
  1. Save the form as a .xls file type

To ensure the correct calculation of the amount of SGC you owe and efficient processing of your amnesty application, you need to:

  • Use the Mail function in the Business Portal or Online Services For Agents
  • Select New message
  • Type Topic: Superannuation
  • Type Subject: Lodge SG Amnesty
  • Attach the completed forms for each quarter to the secure mail message. You can attach up to six forms totalling no more than 4MB.

If you are eligible for the amnesty, you will be informed in writing within 14 business days. As payment is required by 7 September 2020 we recommend that forms are lodged on or before 18 August 2020.

ANYTHING ELSE I NEED TO BE AWARE OF?

Contributions made under the amnesty are considered concessional contributions and may cause employees to exceed their $25,000 annual contributions cap. Individuals will need to apply for the commissioner's discretion to ensure the amnesty payments do not disadvantage them.

As always if you're not sure, drop us a line or shoot me an email jason@illumin8.com.au

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