ATO has reminded trustees of SMSFs with a lodgment due date of 31 October to lodge before the due date for their SMSF annual return (SAR). The 31 October due date applies to those funds in their first year and SMSFs that didn’t lodge the previous year’s return on time. All other SMSFs generally have 28 February as a due date.
For those SMSFs who cannot meet the 2020 SAR lodgment date, the ATO says trustees should make contact to obtain a deferral before the due date. This can be done through a phone call to the ATO or through your tax agent. Further, the ATO notes that as 31 October 2020 is a Saturday, the last day to lodge for this year is 2 November 2020.
SMSFs that have an overdue annual return without obtaining a deferral may incur consequences including penalties, loss of tax concessions, and changing of fund status. According to the ATO, if your SMSF is more than 2 weeks overdue on any annual return lodgment, it will change the status of the SMSF on Super Fund Lookup to “Regulation Details Removed”.
Having the “Regulation Details Removed” status means that the Australian Prudential Regulation Authority (APRA) funds won’t be able to rollover any member benefits to the SMSF, and employers won’t be able to make any super guarantee contribution payments for members of the SMSF. The status will remain until all overdue SAR lodgments have been brought up to date.
Remember, as a trustee of an SMSF you have annual obligations in addition to just lodging the SAR by the due date. These obligations include:
- Ensuring funds’ assets are at market value;
- Meeting minimum annual income stream payments as required;
- Obtaining actuarial certificates (if required);
- Preparing the fund’s end of year financial accounts and statements;
- Appointing an approved SMSF auditor not more than 45 days before the SMSF annual return is due;
- Reviewing and documenting the fund’s investment strategy; and
- Maintaining all fund records as required under the super laws.
Due to the current economic conditions created by COVID-19, the ATO notes that trustees may have additional challenges, and as such it encourages those that need help to use the SMSF early engagement and voluntary disclosure service. The service provides an opportunity for SMSF trustees to engage early with the ATO in relation to unrectified contraventions of the fund. To use the service, trustees are expected to have developed plans to rectify the contraventions as soon as possible.
Any disclosures made under the voluntary disclosure service will be taken into account by the ATO when considering the level of enforcement action to the be taken and the level of remission in relation to administrative penalties.