Article by Mark Davidson, Tax Debt Solved, Gold Coast Office.
Failing to pay superannuation; Government proposes superannuation guarantee amnesty
Whilst it appears that the ATO is pushing for a number of harsh penalties recently, there is legislation that will provide relief for some employers. The Government has proposed a superannuation guarantee amnesty, which will provide a “no penalty option” for employers who fail to report superannuation obligations on time or miss compulsory payments to their employees.
The superannuation guarantee amnesty has previously been proposed. Unfortunately, it was part of a number of other legislation changes that had mixed opinions. With the election in May 2019, these proposals lapsed.
On 18 September 2019, the Assistant Treasurer and Minister for Housing, the Honourable Michael Sukkar MP announced the “new” proposed superannuation guarantee amnesty and re-introduced the associated legislation into Parliament. There appears to be great support for this policy. It is currently before the House of Representatives.
Benefits of the Government’s proposal
The amnesty will provide a one-time only opportunity to an employer that has missed some superannuation deadlines however they would like to bring their accounts into line without being penalised.
The principle of the policy is to encourage employers to maintain their compliance and correct their historical superannuation non-compliance. Employers will be able to amend any non-compliance as far back as 1 January 1992.
The policy will allow the employer to:
- Avoid administrative penalties, being $20 per employee per quarter;
- Claim a one-off deduction for superannuation guarantee amounts paid during the relevant period; and
- Avoid liability for Part 7 penalties, which can be up to 200% of the SGC liability per quarter.
What happens now and what should you do
Until the law is enacted by Parliament, the ATO will continue to apply existing law. Employers considering taking advantage of the proposals are encouraged to wait until it is passed. Once enacted, employers will have a 6-month period to apply.
Employers are encouraged to review their superannuation obligations with their accountant or engage their accountant to complete an audit to ensure they have met their obligations. If your superannuation obligations are not met, then the amnesty may provide a perfect opportunity for your business.
Going forward – Single Touch Payroll
With the introduction of Single Touch Payroll, it will be easier for the ATO to identify areas of non-compliance and enforce penalties. Since 1 July 2018, the ATO has contacted approximately 22,000 employers and raised assessments for $805 million in outstanding superannuation guarantee charges.
Contact us for Advice and Assistance
If you are having trouble paying superannuation, or you wish to discuss any issues or problems your business is facing in general, the professionals at TAX DEBT SOLVED can help with a free, no-obligation consultation, so contact us here.
