Early engagement service to be centralised: ATO

The ATO believes its proposed early engagement and voluntary disclosure service for SMSFs will significantly improve the interaction with trustees and practitioners when it comes to handling breaches.

The service, to commence in May, was created in response to feedback the ATO has received from SMSF trustees and professionals.

“The lack of a publicised, clear process of specific information in relation to SMSF disclosures of unrectified regulatory contraventions means that information is received by us via multiple channels and is no doubt a cause of frustration and concern for SMSF trustees and professionals,” ATO assistant director Fran Kearney said last week.

“We are developing an early engagement and voluntary disclosure service so that you can be put in contact with people in the ATO who can help you with your complex SMSF issues and, where appropriate, help you rectify regulatory breaches.

“[It will] provide a centralised way for SMSFs to notify us of any unrectified regulatory contraventions and facilitates early engagement and rectification.

“We are committed to building and delivering a transformed client experience.”

Trustees can apply by completing the SMSF regulatory contravention disclosure PDF form, which will be made available on the ATO website, or in writing.

The completed form or written application along with any relevant supporting documentation should be submitted via fax, post or email, which is an unsecured channel.

The ATO said it was working on developing an online form to allow information to be completed and submitted securely online.

An authorised representative can also apply on behalf of a trustee.

The ATO will acknowledge the SMSF’s voluntary disclosure in writing within 28 days.

The voluntary disclosure would then be risk assessed, Kearney said.

“Depending on the facts and circumstances of each case, it will generally result in an ATO review to consider the undertaking or rectification proposal,” she said.

“The service should only be utilised when it’s clear that there has been a breach of the Superannuation Industry (Supervision) Act.

“It is expected that the trustees will have engaged SMSF professionals to receive guidance about rectifying the breach prior to using this service.

“The proposed early engagement and voluntary disclosure service is intended to provide a single entry point for SMSF trustees and professionals to engage early with us in relation to serious unrectified contraventions.”

She stressed the SMSF auditor role remained critical to the successful operation of the SMSF industry regardless of the introduction of the ATO’s proposed service.

“It is expected that the SMSF auditor will continue to detect and report regulatory breaches via an ACR [auditor contravention report] to the ATO,” she said.

“However, we will not commence an audit based on an ACR if the issue has been resolved via a voluntary disclosure, unless of course additional information warrants further investigation.

“By working with us to rectify serious breaches, the early engagement should result in more timely and better enforcement outcomes for the SMSF trustee.”

As at 30 June 2015, there were 557,000 SMSFs holding $590 billion in assets, with more than 1 million SMSF members.

“So as you can imagine, as the regulator of SMSFs we have a huge responsibility to the Australian community to ensure the integrity of the SMSF segment,” Kearney said.

“Our focus therefore is not on increasing revenue; it’s safeguarding incomes for retirement by ensuring that SMSFs are not used as a vehicle for obtaining a present-day benefit and that SMSFs aren’t inappropriately accessing the tax concessions available.

“We appreciate that to maintain this level playing field and ensure SMSFs are operating within all legislative requirements, we need to make it easier for SMSFs to engage with us early to voluntarily disclose and rectify contraventions.”

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