Employer Superannuation Guarantee Amnesty
Clarke McEwan Accountants
Back in May 2018, the Government announced an amnesty for employers who had fallen
behind with their superannuation guarantee (SG) obligations. Under the amnesty, employers could catch up or "self-correct" outstanding SG payments for any period from 1 July 1992 up to 31 March 2018. The intent was to reduce the estimated $2.85 billion owed by employers in late or missing SG payments.
Running from 24 May 2018 for 12 months, the amnesty was to provide relief from some of the punitive penalties that normally apply to late SG payments.
To take advantage of the
amnesty, employers were to make voluntary disclosures to the ATO about outstanding payments.
But, the legislation enabling the amnesty has stalled in the Senate. Up until recently, the ATO was encouraging employers to make voluntary disclosures with the view that when the legislation passed Parliament, the amnesty would be applied. However, any employer who made a voluntary disclosure to the ATO will not benefit from the reduced punitive penalties unless the legislation passes, which at this stage, is highly unlikely in its current form.
Further, the Tax Commissioner has no discretion under the law to reduce the penalties applied to employers in this scenario, so if the legislation doesn't pass, then there isn't much the ATO can do to soften the blow. In September 2018, an ATO spokesperson confirmed that until the legislation is enacted, the tax office will be required to apply the existing law.
"The administration component of the SG charge remains legally payable and deductions cannot be claimed. However, the ATO will not require payment of the administration component until the outcome of the legislation is known ," an ATO spokesperson told Accountants Daily.
"If the proposed law does not come into effect, any contributions and payments made under the Amnesty will not be tax-deductible, and any self-assessments that anticipated the new law will need to be amended to include the administration component, and employers will be required to pay the administration component. Part 7 penalties will be imposed and may be remitted in accordance with our existing remission policies.
"You will not be able to receive a refund for payments you have made under the Amnesty if the law does not pass, as these amounts were always payable under the existing law." However, a senior tax trainer at TaxBanter, Robyn Jacobson believes disclosure will ultimately lead to better outcomes for employers.
"The employer will always be better off disclosing than not disclosing: they will either get a better deal on penalties if the law doesn't pass (although the amount won't be deductible, but that is the current law anyway), or they will be protected under the Amnesty if it does pass," said Ms Jacobson.
"In this environment, there is an increased chance that the employee will become aware of their employer's non-compliance and approach the ATO directly. Importantly, if an employee does a 'dob-in', a subsequent ATO review or audit of the employer will render the employer ineligible for the Amnesty.
"Ultimately, the employer needs to decide whether to disclose now, and they need to understand the implications of their decision if they don't." **
Editors note: If the SGA affects you we urge you to contact your tax practitioner for advice about your employees and contractors.
#clarkemcewan #superamnesty #employersuper #employeesuper #SGC
**content courtesy of accountantsdaily**
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