The government’s latest initiatives targeting non-compliance with superannuation guarantee (SG) obligations give businesses plenty to think about. With Single Touch Payroll (STP) on the way, the government suggests all businesses should take time to review their arrangements for paying their employees’ super.
The government is proposing a 12 month “amnesty” for employers to voluntarily disclose and correct any historical underpayments of SG contributions for any period up to 31 March 2018 without incurring penalties for the usual administration fee. This is provided the ATO has not already commenced a compliance audit. Additionally, employers will be entitled to claim deductions for the catch-up payments they make under amnesty. They will still need to pay the usual interest charges however.
While these incentives are welcomed, there is one problem: legislation to enable this amnesty is still before Parliament, with it slated to apply from 24 May 2018 to 23 May 2019. There is no guarantee the legislation will pass, so what does this mean for employers wishing to take advantage of the amnesty?
If an employer discloses now and the amnesty legislation is not passed, the ATO will be required to administer the usual laws. This means catch-up payments will be non-deductible and penalties will apply. However, the ATO may view the employer’s prompt disclosure favourably when deciding whether to use its discretion to reduce the penalties.
So why not take the “wait-and-see”approach? This carries considerable risk. The ATO states that “employers who do not wish to disclose their SG shortfalls during the amnesty period may face harsher penalties if they are audited in the future”. Basically, great risk carries greater responsibility.
The information contained on this website and in this article is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser. Taxation, legal and other matters referred to on this website and in this article are of a general nature only and are based on our interpretation of laws existing at the time and should not be relied upon in place of appropriate professional advice. Those laws may change from time to time.
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